California Assembly Bill AB1169 Amended / Bill

 BILL NUMBER: AB 1169AMENDED BILL TEXT AMENDED IN SENATE AUGUST 9, 2016 AMENDED IN SENATE SEPTEMBER 4, 2015 AMENDED IN SENATE AUGUST 17, 2015 AMENDED IN ASSEMBLY APRIL 20, 2015 AMENDED IN ASSEMBLY MARCH 26, 2015 INTRODUCED BY Assembly Member Gomez FEBRUARY 27, 2015  An act to add Section 12815 to the Government Code, relating to public resources.   An act to amend Sections 44548, 44559.13, and 44559.14 of the Health and Safety Code, relating to economic development, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.  LEGISLATIVE COUNSEL'S DIGEST AB 1169, as amended, Gomez.  Strategic Growth Council: state funding signs.   Economic development: Capital Access Loan Program.   Existing law establishes the Capital Access Loan Program to assist small businesses in financing the costs of complying with environmental mandates and the remediation of contamination on their properties, as specified. Existing law establishes within the program the California Americans with Disabilities Act Small Business Capital Access Loan Program (ADA program) to assist small businesses in financing the costs of projects that alter or retrofit existing small business facilities to comply with the federal Americans with Disabilities Act. Existing law, for the purposes of the ADA program, defines a small business as a business that has less than $1,000,000 in total gross annual income and meets other requirements and requires moneys in the ADA program fund, which is continuously appropriated, to be used for contributions in support of qualified loans, costs to educate the small business community and participating lenders about the program, and administrative expenditures, as specified. Existing law also establishes within the Capital Access Loan Program the California Seismic Safety Capital Access Loan Program to assist residential property owners and small business owners in seismically retrofitting residences and small businesses by covering losses on qualified loans for those purposes. Under existing law, the California Pollution Control Financing Authority administers all of these programs and is authorized to establish small business assistance funds for certain purposes, including, among others, funding the programs.   This bill would expand the definition of small business for the purposes of the ADA program to include businesses with less than $5,000,000 in total gross annual income. The bill would authorize moneys in the ADA program fund to be used for payments to participating financial institutions or borrowers to provide incentives to participate in the ADA program, as specified, would require the authority to adopt related regulations, and would authorize small business assistance funds to include contributions and nonreimbursable payments made directly to borrowers or participating financial institutions in furtherance of the ADA program, the Capital Access Loan Program, or other programs administered by the authority as part of the Capital Access Loan Program. By expanding the authorized uses of moneys in a continuously appropriated fund, the bill would make an appropriation.   Existing law, for the purposes of the California Seismic Safety Capital Access Loan Program, requires the authority to adopt regulations that limit the term of loss coverage for each qualified loan to no more than 10 years and that provide for recapture from the loss reserve account of the authority's contribution for each enrolled loan upon maturation or after 10 years from the date of enrollment, whichever happens first.   This bill would shorten the 10-year period for loss coverage and recapture to 5 years.   This bill would declare that it is to take effect immediately as an urgency statute.   Existing law establishes the Strategic Growth Council in state government that consists of various heads of state agencies and certain other members. Existing law requires the council to engage in certain activities, including identifying and reviewing activities and funding programs of member state agencies that may be coordinated to improve air and water quality, improve natural resources protection, increase the availability of affordable housing, improve transportation, meet the goals of the California Global Warming Solutions Act of 2006, encourage sustainable land use planning, and revitalize urban and community centers in a sustainable manner. Existing law provides for the council to award grants and loans to support the planning and development of sustainable communities.   This bill would require recipients of state grant funding from the council or its member state agencies for certain projects to post signs acknowledging the sources of funds for the project pursuant to guidelines adopted by the council. The bill, if a project is funded from state and nonstate sources, would require the state funding sources to be listed first if state funding equals 50% or more of the total project costs.  Vote:  majority   2/3  . Appropriation:  no   yes  . Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   Section 44548 of the   Health and Safety Code   is amended to read:  44548. (a) (1) Subject to any prior contractual obligations to any of its bondholders, the authority may establish one or more small business assistance funds in order to do any of the following: (A) Assist small businesses to achieve financing of pollution control facilities. (B) Assist with the financing of the costs of, among other things, assessment, remedial planning and reporting, technical assistance, cleanup, remediation, and development of brownfield sites, and with other similar or related costs, by providing loans pursuant to subdivision (h) of Section 44526. (C) Fund a capital access program for small businesses pursuant to Article 8 (commencing with Section  44559).   44559), including contributions and nonreimbursable payments made directly to borrowers or participating financial institutions in furtherance of the program.  (2) For the purpose of establishing and maintaining small business assistance funds as it determines to be necessary or desirable to secure its bonds or any issuance thereof or for other authorized purposes, the authority, pursuant to its contracts with participating parties, may levy fees or other charges on, or require deposits from, participating parties receiving financing for a project under this division. The total amount of these fees, charges, and deposits with respect to a single issue of bonds shall not exceed 3 percent of the principal amount of that issue of bonds. (3) Prior to levying any fees or charges or requiring deposits, the authority shall adopt regulations for the operation of the small business assistance funds, the amounts and any payment schedule for the fees, charges, or deposits, eligibility standards for small businesses desiring to use or benefit from the small business assistance funds, and any other matters the authority determines to be necessary for the establishment and maintenance of small business assistance funds. The regulations may provide for differential fees from participating parties based upon the size of a project financed by the authority or other factors determined to be relevant by the authority, and the regulations may restrict any benefits to those eligible small businesses specified in the regulations. (4) The authority may transfer any funds available to it or set aside for its administrative expenses to any small business assistance fund established under this section. (b) (1) The forms of financial assistance that the authority may provide under this section include, but are not limited to all of the following: (A) Payments to reduce, but not eliminate, the interest rate on loans. (B) Payments of part or all of the cost of acquiring letters of credit. (C) Payments of part or all of the cost of acquiring insurance. (D) Payments of part or all of the cost of acquiring guarantees. (E) Payments of part or all of the cost of acquiring other forms of credit support. (F) Payments of part or all of the authority's expenses in issuing revenue bonds or providing other assistance.  (G) Contributions and nonreimbursable payments made directly to borrowers or participating financial institutions in furtherance of programs administered pursuant to Article 8 (commencing with Section 44559).  (2) The authority may also pledge any small business assistance fund, on an individual or pooled basis, to repay, directly or indirectly, the principal of, or interest or premium on, any issue of bonds of the authority or any loan made or acquired pursuant to this section. (3) The authority may also use moneys in a small business assistance fund to assist in the financing of the costs of assessment of, remedial planning and reporting for, technical assistance for, and the cleanup, remediation or development of, brownfield sites, and of other similar or related costs, by providing loans, pursuant to, and under the terms permitted by, subdivision (h) of Section 44526. (4) In addition to other purposes set forth in this section, the authority may use moneys in a small business assistance fund to make or acquire loans or guarantee commercial loans to participating parties eligible for assistance from those funds. (5) Any moneys repaid or returned to the authority in connection with or as a result of any loan or financial assistance made pursuant to this section shall be deposited in the small business assistance fund from which the loan or assistance was originally provided. (6) The authority may contract with qualified financial institutions, including, but not limited to, banks, investment and mortgage bankers, insurance companies, sureties, and guarantors, to provide any necessary assistance in the granting of credit for these purposes. (c) Each small business assistance fund established pursuant to this section shall be deposited in a special account that the Controller shall create. Notwithstanding any other provision of law, and subject to any requirements of federal tax law or regulations relative to maintaining the tax-exempt status of the obligations of the authority, all interest or other gains earned by investment or deposit of money in the special account pursuant to any provision of Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code or pursuant to any other provision of law shall be credited to, and deposited in, the account. (d) In carrying out this section, the authority shall participate with the air pollution control districts and air quality management districts in providing financial assistance in its lending programs.  SEC. 2.   Section 44559.13 of the   Health and Safety Code   is amended to read:  44559.13. (a) It is the intent of the Legislature in this act to create and fund the California Americans with Disabilities  Act  Small Business Capital Access Loan Program to assist small businesses in complying with the Americans with Disabilities Act. It is not the intent of the Legislature to assist the physical expansion of small businesses that includes modifications that comply with the Americans with Disabilities Act. The program shall be administered by the California Pollution Control Financing Authority and follow the terms and conditions for the Capital Access Loan Program for Small Businesses in this article with the additional program requirements specified under this section. (b) For purposes of this section, unless the context requires otherwise, the following words and terms shall have the following meanings: (1) "Americans with Disabilities Act" means the federal Americans with Disabilities Act  of 1990  (42 U.S.C. Sec. 12101 et seq.) and amendments thereto. (2) "California Americans with Disabilities Act Small Business Capital Access Loan Program Fund" or "fund" means a fund established and administered by the authority pursuant to Sections 44548 and 44549 to be used for purposes of this program. (3) "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 Americans with Disabilities Act. (4) "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 Americans with Disabilities Act, and the financing necessary to pay eligible costs of the project. (5) "Qualified loan" means a loan or portion of a loan as defined in subdivision (j) of Section 44559.1, where the proceeds of the loan or portion of the loan are limited to the eligible costs for an eligible project under this program, and where the loan or portion of the loan does not exceed fifty thousand dollars ($50,000). (6) "Small business" or "qualified business" means a business referred to in subdivisions (i) and (m) of Section 44559.1, that meets the following additional criteria: (A) Fifteen or fewer full-time equivalent employees. (B) Less than  one million dollars ($1,000,000)   five million dollars ($5,000,000)  in total gross annual income from all sources. (C) Does not provide overnight accommodations. (c) (1) The California Americans with Disabilities Act Small Business Capital Access Loan Program Fund is established in the State Treasury for, and shall be administered by the authority pursuant to Sections 44548 and 44549 for, this program. Notwithstanding Section 13340 of the Government Code, all money in the fund is continuously appropriated to the authority for carrying out the purposes of this section. The authority may divide the fund into separate accounts. All moneys accruing to the authority pursuant to this section from any source shall be deposited into the fund. (2) All moneys in the fund derived from any source shall be held in trust for the life of this program, subject to the program expenditures and costs of administering this section, as follows: (A) Program expenditures shall include both of the following: (i) Contributions paid by the authority in support of qualified loans.  (ii) Payments made to participating financial institutions or borrowers to provide incentives to participate in the program, to the extent that moneys other than the initial appropriation are deposited into the fund and are authorized for that use.   (ii)   (iii)  Reasonable costs to educate the small business community and participating lenders about the program, including travel within the state. (B) Administrative expenditures shall be limited to 5 percent of the initial appropriation plus 5 percent of all moneys recaptured, and shall include all of the following: (i) Personnel costs. (ii) Service and vending contracts necessary to carry out the program. (iii) Other reasonable direct and indirect administrative costs. (3) The authority may direct the Treasurer to invest moneys in the fund that are not required for its current needs in the eligible securities specified in Section 16430 of the Government Code as the authority shall designate. The authority may direct the Treasurer to deposit moneys in interest-bearing accounts in state or national banks or other financial institutions having principal offices located in the state. The authority may alternatively require the transfer of moneys in the fund to the Surplus Money Investment Fund for investment pursuant to Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of Division 4 of  Title 2 of  the Government Code. All interest or other increment resulting from an investment or deposit shall be deposited into the fund, notwithstanding Section 16305.7 of the Government Code. Moneys in the fund shall not be subject to transfer to any other fund pursuant to any provision of Part 2 (commencing with Section 16300) of Division 4 of  Title 2 of  the Government Code, excepting the Surplus Money Investment Fund. (d) The authority shall adopt regulations pursuant to subdivision (c) of Section 44520 to implement the program, including provisions specific to this program as described in this section and further including provisions to: (1) Establish a new loss reserve account for each participating lender enrolling loans in this program. (2) 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. (3) Contribute an additional incentive from the fund for each loan enrolled for a qualified business located in a severely affected  community.   community, or make nonreimbursable payments from other moneys to provide direct incentives to b   orrowers or participating financial institutions to participate in the program.  (4) 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. (5) Limit the term of loss coverage for each qualified loan to no more than five years. (6) Recapture from the loss reserve account the authority's contribution for each enrolled loan upon the maturation of such loan or after five years from the date of enrollment, whichever happens first, to be deposited in the fund and applied to future program and administrative expenditures.  SEC. 3.   Section 44559.14 of the   Health and Safety Code   is amended to read:  44559.14. (a) (1) It is the intent of the Legislature in enacting the act adding this section to create and fund a program to assist residential property owners and small business owners in seismically retrofitting residences and small businesses with a priority on soft-story buildings and unreinforced brick and concrete buildings. It is not the intent of the Legislature to assist the physical expansion of small businesses and residences. (2) The Legislature hereby establishes the California Seismic Safety Capital Access Loan Program. The program shall cover losses on qualified loans by participating lenders to qualified residential property owners or qualified small businesses for eligible projects, as specified under this section. The program shall be administered by the California Pollution Control Financing Authority and follow the terms and conditions for the Capital Access Loan Program in this article with the additional program requirements specified under this section. (b) For purposes of this section, unless the context requires otherwise, the following words and terms shall have the following meanings: (1) "Seismic retrofit construction" means alteration performed on or after January 1, 2017, of a qualified building or its components to substantially mitigate seismic damage. "Seismic retrofit construction" includes, but is not limited to, all of the following: (A) Anchoring the structure to the foundation. (B) Bracing cripple walls. (C) Bracing hot water heaters. (D) Installing automatic gas shutoff valves. (E) Repairing or reinforcing the foundation to improve the integrity of the foundation against seismic damage. (F) Anchoring fuel storage. (G) Installing an earthquake-resistant bracing system for mobilehomes that are registered with the Department of Housing and Community Development. (2) "Eligible costs" means the costs paid or incurred on or after January 1, 2017, for an eligible project, including any engineering or architectural design work necessary to permit or complete the eligible project less the amount of any grant provided by a public entity for the eligible project. "Eligible costs" do not include costs paid or incurred for any of the following: (A) Maintenance, including abatement of deferred or inadequate maintenance, and correction of violations unrelated to the seismic retrofit construction. (B) Repair, including repair of earthquake damage. (C) Seismic retrofit construction required by local building codes as a result of addition, repair, building relocation, or change of use or occupancy. (D) Other work or improvement required by local building or planning codes as a result of the intended seismic retrofit construction. (E) Rent reductions or other associated compensation, compliance actions, or other related coordination involving the qualified residential property owner or qualified small business and any other party, including a tenant, insurer, or lender. (F) Replacement of existing building components, including equipment, except as needed to complete the seismic retrofit construction. (G) Bracing or securing nonpermanent building contents. (H) The offset of costs, reimbursements, or other costs transferred from the qualified residential property owner or qualified small business to others. (3) "Eligible project" means seismic retrofit construction that is necessary to ensure that the qualified building is capable of substantially mitigating seismic damage, and the financing necessary to pay eligible costs of the project. (4) "Qualified building" means a building that is certified by the appropriate local building code enforcement authority for the jurisdiction in which the building is located as hazardous and in danger of collapse in the event of a catastrophic earthquake. (5) "Qualified loan" means a loan or portion of a loan as defined in subdivision (j) of Section 44559.1, where the proceeds of the loan or portion of the loan are limited to the eligible costs for an eligible project under this program, and where the loan or portion of the loan does not exceed two hundred fifty thousand dollars ($250,000). (6) "Qualified small business" means a business referred to in subdivisions (i) and (m) of Section 44559.1 that owns and occupies, or intends to occupy, a qualified building for the operation of the business. (7) "Qualified residential property owner" means either an owner and occupant of a residential building that is a qualified building or a qualified small business that owns one or more residential buildings, including a multiunit housing building, that is a qualified building. (c) (1) The California Seismic Safety Capital Access Loan Program Fund is established in the State Treasury and shall be administered by the authority pursuant to Sections 44548 and 44549 for this program. For purposes of this section, the references in Sections 44548 and 44549 to "small business" shall include "qualified residential property owner," as defined in this section. Notwithstanding Section 13340 of the Government Code, all moneys in the fund are continuously appropriated to the authority for carrying out this section. The authority may divide the fund into separate accounts. All moneys accruing to the authority pursuant to this section from any source shall be deposited into the fund. (2) All moneys in the fund derived from any source shall be held in trust for the life of this program, for program expenditures and costs of administering this section, as follows: (A) Program expenditures shall include both of the following: (i) Contributions paid by the authority in support of qualified loans. (ii) Costs for a qualified expert to validate that the proceeds of the loans are eligible costs, as defined under this section. (iii) Reasonable costs to educate the small business community, residential property owners, and participating lenders about the program, including travel within the state. (B) Administrative expenditures shall be limited to 5 percent of the initial appropriation plus 5 percent of all moneys recaptured, and shall include all of the following: (i) Personnel costs. (ii) Service and vending contracts, other than program expenditures described in subparagraph (A), that are necessary to carry out the program. (iii) Other reasonable direct and indirect administrative costs. (3) The authority may direct the Treasurer to invest moneys in the fund that are not required for its current needs in the eligible securities specified in Section 16430 of the Government Code as the authority shall designate. The authority may direct the Treasurer to deposit moneys in interest-bearing accounts in state or national banks or other financial institutions having principal offices located in the state. The authority may alternatively require the transfer of moneys in the fund to the Surplus Money Investment Fund for investment pursuant to Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government Code. All interest or other increment resulting from an investment or deposit shall be deposited into the fund, notwithstanding Section 16305.7 of the Government Code. Moneys in the fund shall not be subject to transfer to any other fund pursuant to any provision of Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code, excepting the Surplus Money Investment Fund. (d) The authority shall adopt regulations pursuant to Section 44520 to implement the program, including, but not limited to, provisions to: (1) Establish a new loss reserve account for each participating lender enrolling loans in this program. (2) Obtain a certification from each participating lender and qualified small business or qualified residential property owner upon enrollment of a qualified loan that the proceeds of the loan will be used for the eligible costs of an eligible project. (3) Contribute an additional incentive from the fund for each loan enrolled for a qualified small business or qualified residential property owner located in a severely affected community. (4) Restrict the enrollment of a qualified loan in any other Capital Access Loan Program for a qualified small business or qualified residential property owner offered by the authority as long as funds are available for this program. (5) Limit the term of loss coverage for each qualified loan to no more than  10   five  years. (6) Recapture from the loss reserve account the authority's contribution for each enrolled loan upon the maturation of that loan or after  10   five  years from the date of enrollment, whichever happens first, to be deposited in the fund and applied to future program and administrative expenditures. (e) The authority may adopt regulations relating to residential property owner or small business financing as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. For purposes of that Chapter 3.5, 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. 4.   This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:   In order to provide timely assistance to small businesses struggling to comply with the federal Americans with Disabilities Act and to preserve the ability of those small businesses to operate, it is necessary for this act to go into effect immediately.   SECTION 1.   Section 12815 is added to the Government Code, to read: 12815. (a) For purposes of this section, "agency" means the Strategic Growth Council established pursuant to Section 75121 of the Public Resources Code or any of its member agencies. (b) An agency shall require recipients of state grant funding from the agency for a project located in a public space and that provides public benefits, as determined by the agency, to post signs acknowledging the sources of funds for the project. If the project is funded from state and nonstate sources, the state funding sources shall be listed first if the state funding equals 50 percent or more of the total project costs. (c) The Strategic Growth Council shall develop model guidelines for the signage requirements. (d) Each agency shall develop signage requirements for its grant programs consistent with the model guidelines developed pursuant to subdivision (c).