Home Table of Contents

§ 8070. Definitions.

4 CA ADC § 8070Barclays 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 § 8070
§ 8070. Definitions.
In addition to the definitions in Section 8020, the following terms shall have the following definitions, unless the context requires otherwise:
(a) “Borrower” means a Qualified Business which obtains a Qualified Loan from a Participating Financial Institution.
(b) “CalCAP” means California Capital Access Program.
(c) “Change in Terms” means any change in material terms of an enrolled loan, including changes to the name(s) of the borrower or co-borrowers, the total loan amount, the maturity date, or the interest rate.
(d) “Contribution” means any or all eligible funds deposited by the Authority or Independent Contributor to a Loss Reserve Account.
(e) “Executive Director” means the Executive Director of the California Pollution Control Financing Authority, or his or her designee from time to time.
(f) “Fees” or “Fee” means a non-refundable fees or fee as set forth in Health and Safety Code Section 44559.4(c).
(g) “Financial Institution” means an institution as set forth in Health and Safety Code Section 44559.1(d). Financial Institution also includes microbusiness lenders, as defined in Section 13997.2 of the Government Code that make small business loans and require a minimum of four hours of preloan business technical and/or credit assistance to borrowers and a minimum of two hours of postloan assistance each year, and are subject to an audit requirement by its Federal or State regulated funding source.
(h) “Independent Contributor” means any individual, company, corporation, institution, foundation, utility, government agency or other entity, including any consortium of these persons or entities, whether public or private (but excluding any Borrower), that, pursuant to the provisions of this Article, deposits Contributions to a Loss Reserve Account.
(i) “Individual” means a natural person, together, if applicable, with any of his or her spouse, parents, siblings or children or the parents or spouse of any of them.
(j) “Law” means Article 8 (commencing with Section 44559) of Chapter 1 of Division 27 of the California Health and Safety Code, as amended from time to time.
(k) “Loss Reserve Account” means an account held by a Program Trustee or by any Participating Financial Institution that is established and maintained by the Authority for the benefit of a Participating Financial Institution for the purposes set forth in Sections 8073, 8078.6, 8078.11, 8078.18, and 8078.25.
(l) “Money Market Fund” means an open-ended management investment company regulated under the Investment Company Act of 1940, as amended, which values its securities pursuant to Section 270.2a-7 of Title 17 of the Code of Federal Regulations.
(m) “Participating Financial Institution” means a Financial Institution that has been approved by the Authority to enroll Qualified Loans in the Program and has agreed to all terms and conditions set forth in the Law and this Article and as may be required by any applicable federal law providing matching funding.
(n) “Passive Real Estate Ownership” means ownership of real estate for the purpose of deriving income from speculation, trade or rental, but does not include any of the following:
(1) The ownership of that portion of real estate being used or intended to be used for the operation of the business of the owner of the real estate; or
(2) The ownership of real estate for the purpose of construction or renovation, until the completion of the construction or renovation phase.
For purposes of clause (1) above, the Borrower must be using or planning to use upon acquisition or construction of a building, at least 51 percent of the space in an existing building or at least 67 percent of the space in a newly constructed building. The requirements of clause (1) above will be deemed to be satisfied when a Participating Financial Institution makes a Qualified Loan to an Individual, or to a partnership or trust wholly owned or controlled by one or more Individuals, for the purpose of financing property that will be leased to a Qualified Business that is wholly owned by those same Individuals, and in such case the Qualified Loan will be deemed to be made also to such Qualified Business.
(o) “Primary business location in California” means that a business will be deemed to be located in California if either:
(1) a majority of the employees of the business are located in California; or
(2) the Executive Director determines that the Primary business location is in California by finding that the average of the “Payroll Factor” as defined in Revenue and Taxation Code Section 25132, the “Income Factor” as defined in Revenue and Taxation Code Section 25128, and the “Sales Factor” as defined in Revenue and Taxation Code Section 25134 is greater than 50 percent.
(p) “Outstanding Principal Balance” means the amount due and owing to satisfy the payoff of the underlying loan, less interest and other charges.
(q) “Primary economic effect in California” means, as applied to a business activity, that either of the following conditions exists:
(1) At least 51 percent of the total revenues of the business activity are generated in California; or
(2) At least 51 percent of the total jobs of the business activity are created or retained in California.
(r) “Program” means the Capital Access Loan Program for Small Businesses established pursuant to the Law.
(s) “Program Trustee” means a bank or trust company, or the State Treasurer, chosen by the Authority from time to time to hold or administer some or all of the Loss Reserve Accounts.
(t) “Qualified Business” and “Small Business Concern” means a business as set forth in Health and Safety Code Section 44559.1 subdivisions (i) and (m), that is not dominant in its field of operation, and that together with affiliates, has 500 or fewer employees.
(u) “Qualified Loan” means a loan or a portion of a loan made by a Participating Financial Institution to a Qualified Business for any business activity that has its Primary economic effect in California. A Qualified Loan may be made in the form of a line of credit, in which case the Participating Financial Institution shall specify the amount of the line of credit to be covered under the Program, which may be equal to the maximum commitment under the line of credit or an amount that is less than the maximum commitment. “Qualified Loan” does not include any of the following:
(1) A loan for the construction or purchase of residential housing.
(2) A loan to finance Passive Real Estate Ownership.
(3) A loan for the Refinancing of an existing loan when and to the extent that the outstanding balance is not increased.
(4) A loan, the proceeds of which will be used
(A) For any of the following businesses, facilities, or purposes regardless of the source of funds used for the Authority's Contribution:
(i) massage parlor, sauna or hot tub facility, racetrack, facility primarily used for gambling or to facilitate gambling, liquor store, bar, a store or other facility whose principal business is the sale of firearms, a store or other facility whose principal business is the manufacture or sale of tobacco or tobacco products, a store or other facility whose principal business is religious, escort service, nudist camp, adult entertainment (including strip clubs, adult book stores, and businesses whose principal business is the sale of pornography), gun club, or shooting range or gallery.
(ii) a business engaged in speculative activities that develop profits from fluctuations in price rather than through the normal course of trade, such as wildcatting for oil and dealing in commodities futures, unless those activities are incidental to the regular activities of the business and part of legitimate risk management strategies to guard against price fluctuations related to the regular activities of the business;
(iii) a business that earns more than half of its annual net revenue from lending activities, unless the business is a non-bank or non-bank holding company certified as a Community Development Financial Institution;
(iv) a business engaged in pyramid sales plans, where a participant's primary incentive is based on the sales made by an ever-increasing number of participants;
(v) a business engaged in activities that are prohibited by federal law or applicable law in the jurisdiction where the business is located or conducted. Included in these activities is the production, servicing, or distribution of otherwise legal products that are to be used in connection with an illegal activity, such as selling drug paraphernalia or operating a motel that permits illegal prostitution on its premises;
(vi) businesses that may be restricted by federal law;
(vii) activities that relate to acquiring or holding passive investments such as commercial real estate ownership, the purchase of securities, and lobbying activities as defined in Section 3(7) of the Lobbying Disclosure Act of 1995. P.L. 104-65, as amended;
(viii) financing a non-business purpose;
(ix) covering the unguaranteed portions of an Small Business Administration loan unless the Authority receives prior written consent of the U.S. Treasury; or
(x) supporting existing extension of credit, including prior loans, lines of credit or other borrowings that were previously made available as part of a substantially similar governmental small business credit enhancement program.
(B) to provide any of the following facilities when the Authority's Contributions will be paid for with fees from the issuance of tax-exempt bond sales, all items listed in (A) and: a store whose principal business is the sale of alcoholic beverages for consumption off premises, private or commercial golf course, country club, spas that provide massage services, tennis club, skating facility (including roller skating, skateboard, and ice skating), racquet sports facility (including any handball or racquetball court), suntan facility, airplane, aircraft, skybox (or other private luxury box), health club facility.
(C) in any manner that could cause the interest on any bonds previously issued by the Authority to become subject to federal income tax, as specified in writing to all Participating Financial Institutions by the Executive Director.
(5) any loan or portion thereof to the extent the same loan or portion thereof has been, is being, or will be enrolled in any other government program substantially similar to the Program.
(6) any loan that exceeds $5,000,000.
(7) any loan or portion thereof to the extent that enrollment of the loan will cause the Borrower (including all related entities among which a common enterprise exists) to have a total enrolled principal amount in excess of $2,500,000 at any Participating Financial Institution over a three-year period.
(v) “Quarterly Report” means the mandatory report on the status of loans enrolled submitted to the Authority by each Participating Financial Institution on a quarterly basis, no later than the 15th of the month following the end of each quarter.
(w) “Recapture” means the withdrawal of the Authority's Contributions pursuant to each program's rules set forth in Sections 8078.11, 8078.18, and 8078.25.
(x) “Refinance” means the revision or restructure of an existing debt obligation with or without a new debt obligation with different terms and conditions, including an increase to the outstanding principal balance, an extended maturity date or term, or permitting another borrower to assume the loan.
(y) “Severely Affected Community” means any area, as designated by the Executive Director, contiguous to the boundaries of a military base designated for closure pursuant to Public Law 101-150, as amended; and any other comparable economically distressed geographic area so designated by the Executive Director from time to time.
(z) “Small Business Assistance Fund” means a fund of that name created by the Authority.
(aa) “Standards” means the criteria to be used by an Independent Contributor in assisting businesses through the Program.
(bb) “TRAC Lease” means “Terminal Rental Adjustment Clause” as defined in Section 7701(h)(3) of Title 26 of the United States Code.

Credits

Note: Authority cited: Sections 44520 and 44559.5(f), Division 27, Health and Safety Code. Reference: Sections 44559.1, 44559.2, 44559.3, 44559.4, 44559.5, 44559.7, 44559.9 and 44559.12, Division 27, Health and Safety Code.
History
1. New article 7 and 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 subsections (n)(3) and (p) and Note transmitted to OAL 9-16-94 and filed 10-31-94 (Register 94, No. 44).
3. Amendment of subsections (d) and (e), new subsections (f) and (g) and subsection relettering, amendment of newly designated subsection (i), new subsections (j)-(k)(2) and subsection relettering, amendment of newly designated subsections (l) and (m)(2), repealer of former subsections (m)(3)-(m)(3)(B), amendment of newly designated subsections (t)-(v), new subsection (w), and amendment of Note 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 subsection (d), new subsection (k), subsection relettering, and amendment of newly designated subsection (r), transmitted to OAL 8-2-96 and filed 9-10-96 (Register 96, No. 37).
5. Amendment of subsections (d), (f) and (l)(1) filed 12-23-98; operative 12-23-98 pursuant to Government Code section 11343.4(d) (Register 98, No. 52).
6. Amendment of subsections (e), (t) and (t)(4)(A) 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 subsections (l)-(l)(2), subsection relettering and amendment of newly designated subsection (s)(4)(A) 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. Change without regulatory effect redesignating former section (e) as new subsection (e)(1) and adding subsections (e)(2)-(3) filed 10-29-2001 pursuant to section 100, title 1, California Code of Regulations (Register 2001, No. 44).
11. Amendment of subsection (d) 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.
12. Certificate of Compliance as to 12-29-2005 order transmitted to OAL 4-21-2006 and filed 6-1-2006 (Register 2006, No. 22).
13. New subsection (e)(3), subsection renumbering, amendment of subsection (f), new subsection (s)(5) and amendment of subsection (v) 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.
14. Certificate of Compliance as to 1-22-2008 order, including amendment of subsection (j) and repealer of subsections (j)(A)-(j)(B)(2), transmitted to OAL 5-30-2008 and filed 7-14-2008 (Register 2008, No. 29).
15. Amendment of subsection (d), redesignation and amendment of former subsection (e)(1) as subsection (e), repealer of subsections (e)(2)-(4), new subsection (s)(6) and amendment of Note 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.
16. Certificate of Compliance as to 2-11-2009 order transmitted to OAL 5-29-2009 and filed 6-23-2009 (Register 2009, No. 26).
17. Amendment of subsection (s)(4)(A) 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.
18. Amendment of subsection (s)(4)(A) refiled 6-21-2010 as an emergency; 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.
19. Repealer of 6-21-2010 operative amendment of subsection (s)(4)(A) by operation of law; operative 9-21-2010 (Register 2010, No. 40).
20. Amendment of subsection (s)(4)(A) 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.
21. Amendment of subsection (r), repealer of subsections (r)(1)-(2), amendment of subsection (s)(6), new subsection (s)(7), repealer of subsection (v) 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.
22. Certificate of Compliance as to 9-29-2010 order transmitted to OAL 11-24-2010 and filed 1-6-2011 (Register 2011, No. 1).
23. Amendment of subsections (d), (r) and (s)(4)(A), new subsection (s)(4)(B) and subsection relettering 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.
24. Notice of repeal and deletion of 11-29-2010 emergency amendment by operation of Government Code section 11346.1(f) (Register 2011, No. 33).
25. Amendment of subsection (r), repealer of subsections (r)(1)-(2), amendment of subsections (s)(4)(B) and (s)(6), new subsection (s)(7), repealer of subsection (v) and subsection relettering filed 8-16-2011; operative 8-16-2011 pursuant to Government Code section 11343.4(c) (Register 2011, No. 33).
26. Certificate of Compliance as to 3-7-2011 order transmitted to OAL 7-29-2011 and filed 8-16-2011 (Register 2011, No. 33).
27. Amendment of subsections (j), (s), (s)(4)(A) and (s)(7) and new subsection (w) 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.
28. Certificate of Compliance as to 11-7-2011 order, including amendment of Note, transmitted to OAL 2-22-2012 and filed 2-29-2012 (Register 2012, No. 9).
29. Amendment of subsection (e) filed 3-2-2012 as an emergency; operative 3-2-2012 (Register 2012, No. 9). A Certificate of Compliance must be transmitted to OAL by 8-29-2012 or emergency language will be repealed by operation of law on the following day.
30. Repealer of definition of “Early Stage Loan,” new definition of “Contribution” and amendment of definitions of “Independent Contributor,” “Loss Reserve Account” and “Standards” 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 3-2-2012 order transmitted to OAL 6-13-2012 and filed 7-26-2012 (Register 2012, No. 30).
32. Certificate of Compliance as to 6-25-2012 order transmitted to OAL 12-20-2012 and filed 2-4-2013 (Register 2013, No. 6).
33. Amendment of subsections (s)(4)(A)-(B) 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.
34. Certificate of Compliance as to 12-24-2013 order transmitted to OAL 5-12-2014 and filed 6-18-2014 (Register 2014, No. 25).
35. Amendment 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).
36. Certificate of Compliance as to 8-7-2017 order, including further amendment of subsections (u)(3), (u)(4)(A) and (x), 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).
37. Amendment of subsection (w) 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.
38. 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).
39. Amendment of subsection (w) 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.
40. 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, § 8070, 4 CA ADC § 8070
End of Document