AB 407 California Assembly · 2025-2026 Regular Session

California Pollution Control Financing Authority.

Summary

(1) Existing law establishes the California Pollution Control Financing Authority (CPCFA) , consisting of 3 members: the Director of Finance, the State Treasurer, and the State Controller. Existing law establishes the Capital Access Loan Program for Small Businesses, which is administered by the CPCFA, to assist qualifying small businesses in the state access capital. Existing law establishes the California Capital Access Fund within the authority to be used for purposes of the program. This bill would require all moneys accruing to the authority pursuant to the program to be deposited into the fund. The bill would authorize other private, state, or federal funding sources to be received and accepted into the fund, as specified. By creating a continuously appropriated fund, this bill would make an appropriation. (2) Existing law establishes the California Americans with Disabilities Act Small Business Capital Access Loan Program to assist small businesses in complying with the federal Americans with Disabilities Act of 1990. Existing law establishes the California Americans with Disabilities Act Small Business Capital Access Loan Program Fund, which is continuously appropriated to CPCFA for carrying out the purposes of the program. Existing law requires that all moneys in the fund be held in trust for the life of the program, subject to program expenditures and costs of administering the program. Existing law specifies those program expenditures. This bill would include financial assistance, as defined and specified, as a program expenditure described above. By expanding the expenditures that may be made from a continuously appropriated fund, this bill would make an appropriation. (3) Existing law establishes the California Seismic Safety Capital Access Loan Program to cover losses on qualified loans by participating lenders to qualified residential property owners or qualified small businesses, as those terms are defined. Existing law establishes the California Seismic Safety Capital Access Loan Program Fund, which is continuously appropriated to CPCFA for carrying out the purposes of the program. Existing law requires that all moneys in the fund be held in trust for the life of the program, subject to program expenditures and costs of administering the program. Existing law specifies those program expenditures. This bill would include financial assistance, as defined and specified, as a program expenditure described above. By expanding the expenditures that may be made from a continuously appropriated fund, this bill would make an appropriation.

Bill status failed 1 of 4 stages cleared

Introduction

Feb 2025

Committee Review

Floor Vote

Governor

Introduced Feb 4, 2025 Last action Feb 2, 2026

Maddy AI version diff · 3 comparisons

What changed between versions

04/23/25 - Amended Assembly → 05/05/25 - Amended Assembly · 3 edits · May 5, 2025

MINOR

AB 407 was amended to remove a provision that would have allowed financial institutions regulated by the Department of Financial Protection and Innovation (DFPI) to participate in the Capital Access Loan Program for Small Businesses, narrowing the pool of eligible lenders. The amendment also simplified the language regarding the continuous appropriation of the California Capital Access Fund. The remaining changes are primarily re-pagination and formatting adjustments to the rate reduction bonds section, which is substantively unchanged.

ELIGIBILITY

Removed the provision that would have allowed financial institutions regulated by the Department of Financial Protection and Innovation to participate in the Capital Access Loan Program for Small Businesses. Previously, only institutions domiciled in California or with their principal office in the state could participate; this amendment eliminates the additional DFPI-regulated institution pathway.

FISCAL

Simplified the language regarding the California Capital Access Fund. Removed the explicit statement that 'all moneys in the fund are continuously appropriated to CPCFA for the purpose of carrying out the program,' while retaining the requirement that moneys accruing to the authority be deposited into the fund and the reference to a continuously appropriated fund.

TECHNICAL

Restructured the Legislative Counsel's Digest by consolidating paragraphs, changing numbering from (2)-(4) to (1)-(3), and reducing the bill length by one page (from 98 to 97 pages). The rate reduction bonds statutory text is substantively unchanged but re-paginated.

02/04/25 - Introduced → 04/23/25 - Amended Assembly · 4 edits · Apr 23, 2025

MODERATE

The amended version removes the California Pollution Control Financing Authority's (CPCFA) role as a reviewer and qualifier of rate reduction bond issuances, along with its annual reporting obligation to the Legislature and its authority to adopt emergency regulations. The bill still authorizes publicly owned utilities to issue rate reduction bonds through joint powers authorities, but now places all pre-issuance determinations solely in the hands of the local agency's legislative body without a state-level review gate.

Scope change

The bill's scope narrowed by eliminating the state-level (CPCFA) oversight layer. Previously, even after a local agency made its legislative determinations, CPCFA had to qualify each bond issuance before it could proceed. Now the process goes directly from local agency determination to authority issuance without an intermediate state review step.

ENFORCEMENT

Removed the requirement that CPCFA review each proposed issuance of rate reduction bonds and determine whether it qualified for issuance under the section. This included CPCFA's authority to set application fees, retain independent financial advisors, provide written explanations for refusals, and take action within 60 days of receiving an application.

Removed the requirement that CPCFA submit an annual report to the Legislature by March 31 detailing applications received, qualified issuances, bonds sold with interest rates and ratings, and comparisons of interest rates and transactional costs against comparable debt issuance.

SCOPE

Removed CPCFA's authority to adopt emergency regulations relating to the rate reduction bond section under Chapter 3.5 of Part 1 of Division 3 of the Government Code.

ELIGIBILITY

Removed the exemption that would have bypassed the CPCFA review process for local agencies whose determinations were already subject to review by a ratepayer advocate or similar independent public analysis entity.

Floor votes

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No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Feb 2, 2026

Lower · Passed

From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.

lower

May 23, 2025

Lower · Passed

In committee: Held under submission.

lower

May 14, 2025

Committee

In committee: Set, first hearing. Referred to suspense file.

lower

May 6, 2025

Committee

Re-referred to Com. on APPR.

lower

May 5, 2025

Lower · Passed

Read second time and amended.

lower

May 1, 2025

Introduced

From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 10. Noes 0.) (April 30).

lower

Apr 24, 2025

Committee

Re-referred to Com. on L. GOV.

lower

Apr 23, 2025

Lower · Passed

Read second time and amended.

lower

Apr 22, 2025

Introduced

From committee: Amend, and do pass as amended and re-refer to Com. on L. GOV. (Ayes 9. Noes 0.) (April 21).

lower

Feb 18, 2025

Committee

Referred to Coms. on B.&F. and L. GOV.

lower

Feb 5, 2025

Lower · Passed

From printer. May be heard in committee March 7.

lower

1 primary · 0 co-sponsors