California Pollution Control Financing Authority Act: Capital Access Loan Program for Small Businesses.

(1) 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. The act requires the authority, in accordance with the Administrative Procedure Act, to adopt all necessary rules and regulations to carry out its powers and duties. The act expressly authorizes the authority, or any other agency implementing a small business or brownfield site financing assistance program pursuant to an interagency agreement with the authority, to adopt regulations related to small business or brownfield site financing as emergency regulations in accordance with the Administrative Procedure Act. This bill would instead provide that regulations for the financing of small businesses may be adopted, amended, or repealed without complying with the Administrative Procedure Act, except as specified, and make conforming changes. (2) Existing federal law, the federal State Small Business Credit Initiative Act of 2010, provides funding to qualified state-run programs that support lending to small businesses, including state-run capital access loan programs and collateral support programs. The California Pollution Control Financing Authority Act establishes the Capital Access Loan Program for Small Businesses, which is administered by the authority, to assist qualifying small businesses in the state access capital. The act authorizes the authority to enter into contracts with participating financial institutions, and prescribes requirements related to those contracts. The act authorizes a participating financial institution that experiences a default on a qualified loan enrolled in the program to obtain reimbursement from the authority, as specified. The act defines certain terms for purposes of the program, including "severely affected community," which includes an area classified as an enterprise zone pursuant to the Enterprise Zone Act. Existing law repealed the authority to designate enterprise zones and designated program areas effective January 1, 2014. This bill would delete the obsolete reference to enterprise zones from the definition of "severely affected community" and redefine the term, in part, to include an area in a census tract in the state that qualifies as eligible for designation by the United States Treasury as an Opportunity Zone, as provided. This bill would prescribe additional requirements related to contracts between the authority and a participating financial institution, including, among other requirements, prohibiting the term of a contract between the authority and a participating financial institution, including renewals, from extending beyond July 1, 2032, and requiring the contract to include provisions for the dissolution of a loss reserve account created by the authority for the benefit of the participating financial institution. The bill would require a participating financial institution to request, but not require, that a customer who is the recipient of a qualified loan disclose their gender, race, and ethnicity. The bill would specify that these additional requirements apply only with respect to a contract between the authority and a participating financial institution entered into or renewed on or after January 1, 2023. This bill would authorize the authority to, when depositing specified fees to the credit of the loss reserve account for a participating financial institution, transfer to the loss reserve account an amount up to 150% of the amount of the fees paid by the participating financial institution, if matching funds are available under a federal capital access program or other source and a higher fee amount is authorized under the federal program and if the qualified business is a business owned and controlled by socially and economically disadvantaged individuals, as defined. This bill would require the authority, when establishing a loss reserve account for each participating financial institution, to either establish a separate loss reserve account or require separate accounting of all deposits for enrolled loans where the state deposits funds that were derived from the State Small Business Credit Initiative after April 1, 2022. The bill would require, among other things, that a withdrawal from a loss reserve account that includes a deposit made by the authority from funds received from the United States Treasury through an agreement pursuant to the State Small Business Credit Initiative be deposited in an account exclusively for those funds and would prohibit the comingling of these funds with any other funds of the authority. The bill would also prohibit the comingling of specified fee revenues received or recaptured by the authority with funds that were derived from the State Small Business Credit Initiative. This bill would require the authority to submit 3 reports containing specified information related to funding from the State Small Business Credit Initiative to specified policy and fiscal committees of the Legislature following the transfer of each tranche of funding from the United States Treasury to the state. The bill would also require the authority to post on its internet website a copy of each annual report filed with the United States Treasurer, as provided, and submit the quarterly reports filed with the United States Treasurer to specified policy and fiscal committees of the Legislature.