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§ 8072. Loan Enrollment.

4 CA ADC § 8072Barclays Official California Code of RegulationsEffective: July 10, 2023

Barclays California Code of Regulations
Title 4. Business Regulations
Division 11. California Pollution Control Financing Authority (Refs & Annos)
Article 7. Capital Access Program for Small Businesses
Effective: July 10, 2023
4 CCR § 8072
§ 8072. Loan Enrollment.
(a) The terms and conditions of Qualified Loans, including interest rates, fees and other conditions, shall be determined solely by agreement of the Participating Financial Institution and the Borrower.
(b) A Participating Financial Institution shall be authorized to enroll under the Program all or a part of any Qualified Loan:
(1) by notifying the Authority in writing, within 15 business days after the Qualified Loan is made, that it is enrolling a Qualified Loan. For purposes of this section, the date on which the Participating Financial Institution makes a Qualified Loan is the date on which the Participating Financial Institution first disburses proceeds of the Qualified Loan to the Borrower; and
(2) by transmitting to the Authority the Fees collected from the Participating Financial Institution and the Borrower, or the Contribution from an Independent Contributor on behalf of the Borrower and/or the Authority, in connection with the Qualified Loan, and by providing written evidence that the Fees or Contributions have been deposited in a Loss Reserve Account held by either the Participating Financial Institution or the Program Trustee.
(c) The notification to the Authority shall include at least the following information:
(1) Borrower name, which includes the Borrower's legal name and the name by which the Borrower does business, if any, and the business address.
(2) Brief description of the Borrower's business and regular activities, Census Tract Number associated to the Borrower's business address, and the location of the facilities being financed if different, either the SIC Code(s) or the NAICS Code(s) applicable to Borrower's business, and the amount of its annual revenues.
(3) Whether this business has been open for two years or more, and is owned by one of the following: a woman, minority, or veteran.
(4) Brief summary of the intended use of the proceeds of the Qualified Loan.
(5) Amount of the Qualified Loan being enrolled (and indication if less than the full amount of the Qualified Loan is being enrolled) and the Participating Financial Institution loan number.
(6) Type of the Qualified Loan (e.g., line of credit, term loan, TRAC Lease).
(7) Date of the Qualified Loan, based on the first disbursement of proceeds to the Borrower.
(8) Interest rate applicable to the Qualified Loan.
(9) Term or maturity date of the Qualified Loan.
(10) Geographic location of the Qualified Business and the location of the facilities being financed if different.
(11) Whether the Qualified Business or the location of the facilities being financed is in a Severely Affected Community.
(12) Whether the loan is secured.
(13) Whether the loan is a Refinance, and if so, the name of the prior lender if different than the Participating Financial Institution, whether the prior loan was enrolled under the Program or any other government lending program, and whether the amount of the loan was increased as part of the Refinance.
(14) Agreed amount of the Fees payable by each of the Borrower and the Participating Financial Institution.
(15) Whether any portion of the Fees payable by the Borrower or the Contribution was or is to be paid by an Independent Contributor; the identity of such Independent Contributor; and a certification that the Independent Contributor has approved the use of its funds to pay such Fees or Contribution in connection with the Qualified Loan.
(16) Number of persons currently employed by the Borrower, and number of jobs expected to be created, retained or affected by the Qualified Loan.
(17) Certification by the Participating Financial Institution that:
(A) The loan is a Qualified Loan, and that the business receiving the Qualified Loan is a Qualified Business.
(B) The Qualified Loan is for a business activity that has its Primary economic effect in California.
(C) Upon request of the Executive Director, the Participating Financial Institution will provide information from the financial records of the Borrower, including documents validating the Borrower's establishment of a business entity, and that the Participating Financial Institution has obtained the consent of the Borrower to such disclosure.
(D) The Participating Financial Institution has obtained a written representation from the Borrower that it has no legal, beneficial or equitable interest in the Fees or the Contribution.
(E) The enrolled amount of the loan does not exceed $2,500,000.
(F) The Participating Financial Institution has notified the Borrower if the Participating Financial Institution's share of the Fees for the Qualified Loan have been paid by the Borrower.
(G) The lending activities of the Participating Financial Institution are subject to any applicable safety and soundness standards as set forth in applicable federal banking regulations.
(H) The Participating Financial Institution has validated that the Borrower has secured or made application for all applicable licenses or permits needed to conduct business.
(I) The Participating Financial Institution has not, and will not, enroll any portion of the same loan in any other government program substantially similar to the Program.
(J) The Qualified Loan is not a Refinance of a loan previously made to the Borrower to the extent that the outstanding balance is not increased.
(K) The Participating Financial Institution has provided the Borrower the Authority's Privacy Notice for the CalCAP for Small Business Loan Program, which provides the notice required under the California Information Practices Act (Civil Code section 1798.17). The Privacy Notice informs the Borrower that personal information protected by the California Information Practices Act may be disclosed under the following circumstances:
(i) To consultants, auditors or contractors retained by the Authority where disclosure is required to fulfill Program requirements and subject to a nondisclosure agreement;
(ii) To another governmental entity where required by state or federal law; or
(iii) As otherwise required by law.
(L) The Participating Financial Institution will make available to the Authority all records related to the use of the funds in the Loss Reserve Account.
The Participating Financial Institution shall be authorized to rely on representations made to the Participating Financial Institution by the Borrower for the information requested in subdivisions (c)(4), (c)(16), (c)(17)(A), (c)(17)(B) and (c)(17)(D); provided that no such Borrower representation may be relied upon if it is known to be false by the lending officer(s) at the Participating Financial Institution who are directly involved in the negotiation of the Qualified Loan. All other certifications shall be based upon the Participating Financial Institution's established due diligence and underwriting standards applied in the regular course of business, and the Participating Financial Institution shall maintain substantiating documentation in the Borrower's loan file.
(18) The Participating Financial Institution must obtain written certification from the Borrower that:
(A) The loan will be used solely for a business purpose;
(B) The loan will not be used to repay delinquent federal or state income taxes unless the Borrower has a payment plan in place with the relevant taxing authority;
(C) The loan will not be used to repay taxes held in trust or escrow;
(D) The loan will not be used to refinance or reimburse funds owed to any owner, including any equity injection or injection of capital for the business' continuance;
(E) The loan will not be used to purchase any portion of the ownership interest of any owner of the business;
(F) The loan will not be used to finance ineligible businesses or facilities identified in Section 8070;
(G) The Borrower is not:
(i) an executive officer, director, or principal shareholder of the Participating Financial Institution;
(ii) a member of the immediate family of an executive officer, director, or principal shareholder of the Participating Financial Institution; or
(iii) a related interest of such executive officer, director, principal shareholder, or member of the immediate family of the Participating Financial Institution.
(d) If a Borrower seeking a loan from a Participating Financial Institution has less than a majority of its employees in California, the Participating Financial Institution shall be authorized to submit information to, and seek a determination from, the Executive Director that such Borrower has its Primary business location in California. Such determination shall be made by the Executive Director within 10 days of receipt of a written request from a Participating Financial Institution containing information about the business activities of the proposed Borrower.
(e) If a Borrower seeking a Qualified Loan from a Participating Financial Institution is an employee, member, director, officer, principle shareholder, or affiliate of the Participating Financial Institution, the terms and the conditions of the Qualified Loan and the internal procedures used to approve the Qualified Loan must comply with the following requirements:
(1) If the Participating Financial Institution is a federal-chartered bank, the Qualified Loan must be made in accordance with all applicable federal banking laws that regulate conflicts of interests and insider transactions and Sections 371c, 371c-1, 375a, and 375b of the Title 12 of the United States Code, and Sections 215.4 of Title 12 of the Code of Federal Regulations.
(2) If the Participating Financial Institution is a state-chartered bank, the Qualified Loan must be made in accordance with all applicable state banking laws that regulate conflicts of interests and insider transactions and Section 3370 et seq. of the Financial Code, and Sections 10.19300 to 10.19302 of Title 10 of the California Code of Regulations.
(3) If the Participating Financial Institution is a federal-chartered savings association, the Qualified Loan must be made in accordance with all applicable federal banking laws that regulate conflicts of interests and insider transactions and Section 1468 of Title 12 of the United States Code.
(4) If the Participating Financial Institution is a state-chartered savings association, the Qualified Loan must be made in accordance with all applicable state banking laws that regulate conflicts of interests and insider transactions and Sections 6503 and 6529 of the Financial Code.
(5) If the Participating Financial Institution is a federal-chartered credit union, the Qualified Loan must be made in accordance with all applicable federal banking laws that regulate conflicts of interests and insider transactions and Sections 1757 and 1761c of Title 12 of the United States Code and Section 701.21(d) of Title 12 of the Code of Federal Regulations.
(6) If the Participating Financial Institution is a state-chartered credit union, the Qualified Loan must be made in accordance with all applicable state banking laws that regulate conflicts of interests and insider transactions and Section 15050 of the Financial Code.
(7) If the Participating Financial Institution is a not-for-profit certified community development financial institution (CDFI), the Qualified Loan must be made in accordance with all applicable federal banking laws that regulate conflicts of interests and insider transactions and Sections 1805.807 of Title 12 of the Code of Federal Regulations.
(8) If the Participating Financial Institution is a lending institution as described in Section 44559.1(d)(2) of the Health and Safety Code, the Qualified Loan must be made in accordance with any applicable federal laws that regulate conflicts of interests and insider transactions and Section 120.140 of Title 13 of the Code of Federal Regulations.
(f) The Participating Financial Institution may pre-qualify with the Authority any qualified loan. Pre-qualifications do not necessarily guarantee that funds for Contributions will be available at the time of final enrollment, unless the funding source requires it. Pre-qualifications shall be valid for six (6) months.
(g) The Authority shall, upon receipt of documentation and Fees from the Participating Financial Institution, enroll the Qualified Loan if the Executive Director determines that the Qualified Loan meets the requirements of the Law and this Article. The Executive Director shall notify the Participating Financial Institution of enrollment within 15 business days after receipt by the Authority of all documentation and Fees required by the Law and/or this Article. The Executive Director's determination whether a loan shall be enrolled in the Program shall be final. The Executive Director shall be authorized to review an application for enrollment submitted by a Participating Financial Institution in advance of the making of the loan, and notify the institution whether such loan meets the requirements of the Law and this Article.
(h) Upon enrollment of a Qualified Loan, the Contribution shall be transferred for deposit in the Loss Reserve Account (1) by the Authority or (2) by an Independent Contributor, and the Program Trustee shall notify the Participating Financial Institution of the transfer and of the source of funds from which the transfer was made.
(i) The Participating Financial Institution must notify the Authority whenever the material terms of an enrolled loan change prior to maturity, including TRAC Leases assumptions, by submitting a Change in Terms notification within fifteen (15) business days after such change.
(1) If any of the terms other than the interest rate have changed, then the Participating Financial Institution shall also submit an amended loan enrollment application including new lender and borrower certifications, for the loan.
(2) The Participating Financial Institution shall deposit Fees pursuant to Section 8072 for any increase to the total loan amount.
(3) If the Authority determines that the information contained in the Change in Terms constitutes an ineligible Refinance, or not a Qualified Loan as defined in Section 8070, neither the original nor the revised loan will continue to be enrolled in the Program.
(4) Notwithstanding the ineligibility of a Refinance when the outstanding balance is not increased under Section 8070(u)(3), the Authority may authorize an extension of the maturity date of an enrolled loan for up to eighteen (18) months, if the Participating Financial Institution has provided the Authority written certification to its credit policy that provides for such extensions of the maturity date. Such authorization is contingent upon the submittal of the Change in Terms notification, an amended loan enrollment application, and new lender and borrower certifications for the loan.
(j) Without regard to the terms of the loan, the term of enrollment in the Program shall not exceed ten years.

Credits

Note: Authority cited: Sections 44520 and 44559.5, Health and Safety Code. Reference: Sections 44559.2, 44559.4 and 44559.12, Health and Safety Code; and Section 1798.17, Civil Code.
History
1. New section filed 3-21-94 as an emergency; operative 3-21-94 (Register 94, No. 12). This filing was deemed an emergency by Health and Safety Code section 44520(b). A Certificate of Compliance must be transmitted to OAL by 9-19-94 or the emergency regulation will be repealed by operation of law on the following day.
2. Certificate of Compliance as to 3-21-94 order including amendment of subsection (c)(20), new subsections (g) and (h) and amendment of Note transmitted to OAL 9-16-94 and filed 10-31-94 (Register 94, No. 44).
3. Amendment of subsections (b)(1), (b)(2) and (c)(2), new subsections (c)(3) and (c)(4) and subsection renumbering, amendment of newly designated subsection (c)(6), new subsections (c)(8) and (c)(9), amendment of newly designated subsections (c)(11) and (c)(14), new subsection (c)(15), amendment of newly designated subsections (c)(16), (c)(17), (c)(19) and (c)(22), amendment of subsections (d) and (e), new subsection (f) and subsection relettering, and amendment of newly designated subsections (g) and (h) filed 2-6-96 as an emergency pursuant to Health and Safety Code section 44520(b); operative 2-6-96 (Register 96, No. 6). Pursuant to Health and Safety Code section 44520(b), a Certificate of Compliance must be transmitted to OAL by 8-5-96 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 2-6-96 order, including amendment of subsections (c)(4), (c)(15), (c)(17) and (c)(22), and new subsections (c)(23)-(24), transmitted to OAL 8-2-96 and filed 9-10-96 (Register 96, No. 37).
5. Amendment of subsections (a), (b)(2), (c)(2), (c)(3), (c)(15), (c)(19), (c)(22), (d), (e), (h) and (i) filed 12-23-98; operative 12-23-98 pursuant to Government Code section 11343.4(d) (Register 98, No. 52).
6. Amendment of subsections (c)(1)-(3), (c)(19) and (c)(21) filed 2-24-2000 as an emergency pursuant to Health and Safety Code section 44520; operative 2-24-2000 (Register 2000, No. 8). A Certificate of Compliance must be transmitted to OAL by 8-22-2000 or emergency language will be repealed by operation of law on the following day.
7. Certificate of Compliance as to 2-24-2000 order transmitted to OAL 8-21-2000 and filed 10-2-2000 (Register 2000, No. 40).
8. Repealer of subsection (c)(19), subsection renumbering, amendment of newly designated subsection (c)(23) and subsection (d), repealer of subsection (f), subsection relettering and amendment of Note filed 12-18-2000 as an emergency pursuant to Health and Safety Code section 44520; operative 1-1-2001 (Register 2000, No. 51). A Certificate of Compliance must be transmitted to OAL by 7-2-2001 or emergency language will be repealed by operation of law on the following day.
9. Certificate of Compliance as to 12-18-2000 order transmitted to OAL 6-14-2001 and filed 7-26-2001 (Register 2001, No. 30).
10. Amendment of subsections (b)(1) and (g) filed 8-8-2002 as an emergency pursuant to Health and Safety Code section 44520(b); operative 8-8-2002 (Register 2002, No. 32). A Certificate of Compliance must be transmitted to OAL by 2-4-2003 or emergency language will be repealed by operation of law on the following day.
11. Certificate of Compliance as to 8-8-2002 order transmitted to OAL 2-3-2003 and filed 3-6-2003 (Register 2003, No. 10).
12. Amendment of subsection (c)(2), new subsections (e)-(e)(8) and subsection relettering filed 12-29-2005 as an emergency pursuant to Health and Safety Code section 44520(b); operative 12-29-2005 (Register 2005, No. 52). Pursuant to Health and Safety Code section 44520(b), a Certificate of Compliance must be transmitted to OAL by 6-27-2006 or emergency language will be repealed by operation of law on the following day.
13. Certificate of Compliance as to 12-29-2005 order transmitted to OAL 4-21-2006 and filed 6-1-2006 (Register 2006, No. 22).
14. Amendment of subsections (b)(1), (b)(21) and (b)(23) and new subsections (b)(24)-(26) and (e)(9) filed 1-22-2008 as an emergency; operative 1-22-2008 (Register 2008, No. 4). A Certificate of Compliance must be transmitted to OAL by 7-21-2008 or emergency language will be repealed by operation of law on the following day.
15. Certificate of Compliance as to 1-22-2008 order, including amendment of subsection (f), transmitted to OAL 5-30-2008 and filed 7-14-2008 (Register 2008, No. 29).
16. Amendment of subsection (c)(21), redesignation of former subsection (e)(9) as subsection (f) and subsection relettering filed 2-11-2009 as an emergency; operative 2-11-2009 (Register 2009, No. 7). A Certificate of Compliance must be transmitted to OAL by 8-10-2009 or emergency language will be repealed by operation of law on the following day.
17. Certificate of Compliance as to 2-11-2009 order transmitted to OAL 5-29-2009 and filed 6-23-2009 (Register 2009, No. 26).
18. Amendment of subsections (f) and (i) and new subsection (k) filed 12-17-2009 as an emergency; operative 12-17-2009 (Register 2009, No. 51). A Certificate of Compliance must be transmitted to OAL by 6-15-2010 or emergency language will be repealed by operation of law on the following day.
19. Amendment of subsection (f) and (i) and new subsection (k) refiled 6-21-2010 as an emergency, including additional amendments to subsections (c)(23), (e)(8) and (i); operative 6-21-2010 (Register 2010, No. 26). A Certificate of Compliance must be transmitted to OAL by 9-20-2010 or emergency language will be repealed by operation of law on the following day.
20. Repealer of 6-21-2010 operative amendment of subsections (f) and (i) and adoption of new subsection (k) by operation of law; operative 9-21-2010 (Register 2010, No. 40).
21. Amendment of subsections (f) and (i) and new subsection (k) refiled 9-29-2010 as an emergency; operative 9-29-2010 (Register 2010, No. 40). A Certificate of Compliance must be transmitted to OAL by 12-28-2010 or emergency language will be repealed by operation of law on the following day.
22. Amendment of subsection (c)(21), repealer of subsection (j) and subsection relettering filed 11-29-2010 as an emergency; operative 11-29-2010 (Register 2010, No. 49). A Certificate of Compliance must be transmitted to OAL by 5-31-2011 or emergency language will be repealed by operation of law on the following day.
23. Certificate of Compliance as to 9-29-2010 order transmitted to OAL 11-24-2010 and filed 1-6-2011 (Register 2011, No. 1).
24. Amendment of subsections (c)(1)-(2), repealer and new subsection (c)(3) and amendment of subsections (c)(5)-(6) and (c)(22) filed 3-7-2011 as an emergency; operative 3-7-2011 (Register 2011, No. 10). A Certificate of Compliance must be transmitted to OAL by 9-6-2011 or emergency language will be repealed by operation of law on the following day.
25. Notice of repeal and deletion of 11-29-2010 emergency amendment by operation of Government Code section 11346.1(f) (Register 2011, No. 33).
26. Amendment of subsections (c)(1) and (c)(21), repealer of subsection (j) and subsection relettering filed 8-16-2011; operative 8-16-2011 pursuant to Government Code section 11343.4(c) (Register 2011, No. 33).
27. Certificate of Compliance as to 3-7-2011 order transmitted to OAL 7-29-2011 and filed 8-16-2011 (Register 2011, No. 33).
28. Amendment of subsections (c)(3), (c)(6) and (c)(9) and repealer of subsection (c)(26) filed 11-7-2011 as an emergency; operative 11-7-2011 (Register 2011, No. 45). A Certificate of Compliance must be transmitted to OAL by 5-7-2012 or emergency language will be repealed by operation of law on the following day.
29. Certificate of Compliance as to 11-7-2011 order transmitted to OAL 2-22-2012 and filed 2-29-2012 (Register 2012, No. 9).
30. Amendment of subsections (c)(15), (c)(20) and (h) filed 6-25-2012 as an emergency; operative 6-25-2012 (Register 2012, No. 26). A Certificate of Compliance must be transmitted to OAL by 12-24-2012 or emergency language will be repealed by operation of law on the following day.
31. Certificate of Compliance as to 6-25-2012 order transmitted to OAL 12-20-2012 and filed 2-4-2013 (Register 2013, No. 6).
32. Amendment of subsections (b)(1) and (g) filed 2-11-2013 as an emergency; operative 2-11-2013 (Register 2013, No. 7). A Certificate of Compliance must be transmitted to OAL by 8-12-2013 or emergency language will be repealed by operation of law on the following day.
33. Editorial correction adding History 31 and renumbering histories (Register 2013, No. 30).
34. Certificate of Compliance as to 2-11-2013 order transmitted to OAL 7-3-2013 and filed 7-22-2013 (Register 2013, No. 30).
35. Amendment of subsection (f) filed 12-24-2013 as an emergency; operative 12-24-2013 (Register 2013, No. 52). A Certificate of Compliance must be transmitted to OAL by 6-23-2014 or emergency language will be repealed by operation of law on the following day.
36. Certificate of Compliance as to 12-24-2013 order, including amendment of Note, transmitted to OAL 5-12-2014 and filed 6-18-2014; amendments effective 6-18-2014 pursuant to Government Code section 11343.4(b)(3) (Register 2014, No. 25).
37. Amendment of section and Note filed 8-7-2017 as an emergency; operative 8-7-2017 pursuant to Health and Safety Code section 44520(b) (Register 2017, No. 32). A Certificate of Compliance must be transmitted to OAL by 2-5-2018 or emergency language will be repealed by operation of law on the following day, pursuant to Health and Safety Code section 44520(b).
38. Certificate of Compliance as to 8-7-2017 order, including further amendment of subsections (c)(17)(J) and (i) and new subsections (i)(1)-(4), transmitted to OAL 1-31-2018 and filed 3-15-2018; amendments operative 3-15-2018 pursuant to Government Code section 11343.4(b)(3) (Register 2018, No. 11).
39. Amendment of subsection (i)(4) filed 7-31-2020 as an emergency; operative 7-31-2020 (Register 2020, No. 31). Emergency expiration extended 60 calendar days (Executive Order N-40-20) plus an additional 60 days (Executive Order N-66-20). A Certificate of Compliance must be transmitted to OAL by 5-28-2021 or emergency language will be repealed by operation of law on the following day.
40. Certificate of Compliance as to 7-31-2020 order, including amendment of Note, transmitted to OAL 11-24-2020 and filed 1-11-2021; amendments operative 1-11-2021 pursuant to Government Code section 11343.4(b)(3) (Register 2021, No. 3).
41. Repealer of subsection (k) filed 8-4-2022 as an emergency; operative 8-4-2022 (Register 2022, No. 31). A Certificate of Compliance must be transmitted to OAL by 1-31-2023 or emergency language will be repealed by operation of law on the following day.
42. Reinstatement of section as it existed prior to 8-4-2022 emergency amendment by operation of Government Code section 11346.1(f) (Register 2023, No. 5).
43. Repealer of subsection (k) refiled 3-3-2023 as an emergency; operative 3-3-2023 (Register 2023, No. 9). A Certificate of Compliance must be transmitted to OAL by 6-1-2023 or emergency language will be repealed by operation of law on the following day.
44. Certificate of Compliance as to 3-3-2023 order transmitted to OAL 5-30-2023 and filed 7-10-2023 (Register 2023, No. 28).
This database is current through 6/28/24 Register 2024, No. 26.
Cal. Admin. Code tit. 4, § 8072, 4 CA ADC § 8072
End of Document