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State
California Regulations
TITLE 4. BUSINESS REGULATIONS DIVISION 11. CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY
database is current through 09/29/06, Register 2006, No. 39



Foreword
The authorization for the State of California to issue Pollution Control Revenue Bonds was passed by a vote of the people November 7, 1972 (Proposition 3). Enabling legislation (Assembly Bill 1925, Knox) was passed by the State Legislature during the 1972 Regular Session. It was approved by the Governor and filed with the Secretary of State on December 19, 1972 (Chapter 1257, Statutes of 1972), and was titled the California Pollution Control Financing Authority Act. The effective date of Chapter 1257 was March 7, 1973. Several amendments were made by Assembly Bill 542, Knox (Chapter 277, Statutes of 1973) which was effective August 15, 1973. Further amendments have been made by Assembly Bill 4108, Knox (Chapter 1473, Statutes of 1974), Assembly Bill 2126, Knox (Chapter 1165, Statutes of 1975, Assembly Bill 1758, Lewis (Chapter 957, Statutes of 1975), Assembly Bill 2105, Dills (Chapter 1381, Statutes of 1976), Assembly Bill 3750, Knox (Chapter 1384, Statutes of 1976), Assembly Bill 855, Knox (Chapter 650, Statutes of 1977), Assembly Bill 1558, Hart (Chapter 1082, Statutes of 1977), Assembly Bill 121, Lewis (Chapter 1195, Statutes of 1977), Assembly Bill 980, Knox (Chapter 839, Statutes of 1979), Assembly Bill 2646, Bates (Chapter 794, Statutes of 1980), and Senate Bill 216, Boatwright (Chapter 1091, Statutes of 1981). The legislation relating to the Act and the Authority is contained in Division 27 of the Health and Safety Code (commencing with Seciton 44500).


s 8001. Objectives.
The California Pollution Control Financing Authority shall act in such a manner as to achieve the objectives outlined in Sections 44501 and 44502 of the Health and Safety Code.



Note: Authority cited: Section 44525, Health and Safety Code. Reference: Division 27, commencing with Sections 44500, et. seq., Health and Safety Code.


s 8020. Terms/Definitions.
The following terms and definitions shall be used in the manner described below, when used in this Chapter.
(a) "Act" means the California Pollution Control Financing Authority Act, Division 27, commencing with Section 44500 of the Health and Safety Code.
(b) "Applicant" means the person, company, corporation, partnership, entity or group of entities requesting financing pursuant to Section 8031 of these Regulations.
(c) "Authority" means the California Pollution Control Financing Authority.
(d) "Authority Fund" means the California Pollution Control Financing Authority Fund.
(e) "Bonds" means any negotiable bonds, notes, debentures, or other securities which the Authority is authorized to issue pursuant to the Act.
(f) "Chair" or "Chairman" means the Chairman of the California Pollution Control Financing Authority.
(g) "Conventional loan" means any loan agreement, note or other evidence of indebtedness entered into with or issued by an applicant to a bank, thrift or other financial institution or firm which is regularly in the business of extending credit, and which is not related to the applicant.
(h) "Effective Interest Rate" means the actual cost payable by an applicant to obtain financing. The cost includes the cost of issuing the bond or completing a conventional loan, cost of obtaining a letter of credit, surety, insurance policy or other credit enhancement, and the interest rate payable on the bond or conventional loan.
(i) "Executive Director" means the Executive Director of the California Pollution Control Financing Authority.
(j) "Member" means a member of the California Pollution Control Financing Authority.
(k) "Request" means the application form and documents related thereto on which the Authority accepts requests for financing.
(l) "Small Business" means any person, company, corporation, partnership or entity that is classified as a small business pursuant to any of the size standards set forth in Title 13, Code of Federal Regulations, Part 121, Subpart A (1-1-94 Edition), which are incorporated herein by reference, or any person, company, corporation, partnership or entity that (together with affiliates) employs no more than 500 employees.
(m) "Small Business Assistance Fund" means the fund established by the Authority in Section 8041 pursuant to Health and Safety Code Section 44548.



Note: Authority cited: Section 44520, Division 27, Health and Safety Code. Reference: Sections 44520, 44526 and 44548, Division 27, Health and Safety Code.


s 8030. Meetings.
(a) Regular meetings of the Authority will be held on the third Wednesday of each month at Sacramento, California unless the Authority orders a change in meeting dates.
(b) The Chairman shall designate the location of the meeting in the notice calling such meeting.



Note: Authority cited: Section 44520, Division 27, Health and Safety Code. Reference: Sections 44520 and 44534, Division 27, Health and Safety Code; and Section 11125, Government Code.


s 8031. Requests for Financing.
The Authority will accept requests for financing in a form approved by the Executive Secretary. Requests for Financing forms may be obtained by writing to the Authority office located in either the City of Sacramento or Los Angeles.



Note: Authority cited: Sections 44526, Division 27, Health and Safety Code. Reference: Sections 44520 and 44534, Division 27, Health and Safety Code.


s 8032. Acceptance of Requests.
In determining its acceptance or denial of requests for financing, either in whole or in part, the Authority may take into consideration such factors as: (1) certification and recommendationof the appropriate environmental authority, (2) location of the proposed project, (3) nature of the proposed project, (4) time of receipt of request for financing, (5) any other factors the Authority may deem pertinent.



Note: Authority cited: Section 44520, Division 27, Health and Safety Code. Reference: Sections 44520 and 44531-44539, Division 27, Health and Safety Code.


s 8033. Application Fees.
A check drawn on a responsible bank or trust company in the amount of .0005 (one twentieth of one percent) of the amount of financing requested with a minimum of $250.00 and a maximum of $5,000.00, shall be made payable to "CPCFA Fund" and shall accompany each request for financing. Such fees provide for review and processing of the application and are nonrefundable. The application fees shall be applied to the payment of general fees if the project is financed.



Note: Authority cited: Section 44520, Division 27, Health and Safety Code. Reference: Sections 44520, 44525 and 44526, Division 27, Health and Safety Code.


s 8034. General Fees.
The Authority charges a fee for reasonable and necessary administrative and program expenses connected with the sale of bonds. The fee shall be two tenths of one percent (.002) of the face value of the bonds issued. The applicant shall also reimburse the Authority for all reasonable and necessary out of pocket expenses which the Authority may incur at the applicant's request and all other expenses direct or indirect, properly allocable to the proposed financing. Unless paid out of the proceeds of the bonds issued, all fees for a particular proposed financing shall be paid by the applicant and deposited in the Authority Fund. The Authority shall be authorized to use general fees deposited in the Authority Fund to support Authority programs, including, but not limited to, the Capital Access Loan Program authorized by Article 7 of this Division 11.



Note: Authority cited: Section 44520, Division 27, Health and Safety Code. Reference: Sections 44520, 44525 and 44537.5, Division 27, Health and Safety Code.


s 8035. Small Business Assistance Fund Fees.
(a) The Authority shall charge an applicant who is not a small business as defined in Section 8020 a fee in addition to the fees required by Sections 8033 and 8034. The additional fee shall fund the Small Business Assistance Fund (SBAF). The amount of the fee shall be one percent (.01) of the face value of any tax exempt bonds issued and three tenths of one percent (.003) of the face value of any taxable bonds issued; provided, that in connection with the issuance of taxable bonds for which the .003 fee is charged, if such taxable bonds are refinanced with or converted to tax exempt bonds, the applicant shall pay an additional fee for deposit into the Small Business Assistance Fund in the amount of seven tenths of one percent (.007) of the face value of such taxable bonds. In the case of refunding or conversion of bonds, the fee percentage applicable on the date the original bonds were issued will be used to determine if additional SBAF fees are collectable. If the company did not pay a SBAF fee originally, the current fee percentage will apply to refundings or conversions. If federal tax law or other legal provisions prevent the imposition of the above fees, each fee shall be the maximum that can legally be charged.
(b) The Authority shall refund a portion of the fee charged pursuant to subdivision (a) of this section if the occurrence of a subsequent event causes the original fee to exceed the amount allowed by federal tax law provisions, causing the bonds to lose their tax exempt status. The refund shall be the difference between the original fee charged and the maximum fee subsequently determined to be chargeable by bond counsel approved by the Authority.
(c) The Authority shall refund a portion of the fee charged if, in the judgment of the Authority, the amount in the Small Business Assistance Fund account exceeds the amount needed to operate the Small Business Assistance Fund program and to assist small businesses obtain financing. If the Authority makes a refund pursuant to this subdivision, the amount of the refund payable to each applicant shall be computed by multiplying the total amount to be refunded by the percentage each applicant contributed in fees to the total fees collected pursuant to this section.
(d) If an applicant refinances existing bonds with the issuance of new bonds, it shall receive a credit against the fee charged pursuant to this section in an amount equal to the net Small Business Assistance Fund fees paid on the earlier bonds.



Note: Authority cited: Section 44520, Division 27, Health and Safety Code. Reference: Section 44548, Division 27, Health and Safety Code.


s 8036. Notice of Fees.
(a) The Authority shall mail notice to each applicant within thirty days of the effective date of this regulation setting out the fee chargeable pursuant to Section 8035. Thereafter, the Authority shall mail notice to each applicant when the Authority adopts its final resolution authorizing the sale of bonds for financing the applicant's project. If the applicant believes federal tax law provisions mandate a lower fee than that noticed by the Authority, it shall submit, no less than five days before the closing of the bond sale, an opinion of approved bond counsel setting out the maximum, allowable fee. The Authority shall charge the fee set out in the opinion.
(b) If bonds issued by the Authority bear a variable interest rate, the Authority may collect the fee in installments. The first installment shall be based on the maximum fee allowable under federal tax law provisions assuming the bonds bear the maximum interest rate provided for by the bonds. Further installments shall be payable at the discretion of the Authority when actual interest rates on the bonds can be determined.



Note: Authority cited: Section 44520, Division 27, Health and Safety Code. Reference: Section 44548, Division 27, Health and Safety Code.


s 8037. Issuance of Bonds.
The Authority will adopt all necessary resolutions to approve or deny any request for financing. Approval may be made contingent upon appropriate certification.
The form of bonds, any resolution or resolutions authorizing such bonds, any trust agreement securing such bonds and any agreement relating to the purchase, sale or lease of the facilities financed with such bonds, shall be agreed upon to the mutual satisfaction of the Authority and applicant.



Note: Authority cited: Section 44520, Division 27, Health and Safety Code. Reference: Articles 4 and 5, Division 27, Health and Safety Code.


s 8038. Certification.
The applicant will obtain any and all appropriate certificates from affected environmental agencies and submit all such certificates to the Authority prior to adoption of a Final Resolution for the issuance of bonds. If appropriate, a statement should be submitted stating why any approval or certificate has not been obtained or is unnecessary.



Note: Authority cited: Section 44520, Division 27, Health and Safety Code. Reference: Sections 44520 and 44533, Division 27, Health and Safety Code.


s 8039. Public Purposes.
The Authority is not organized for profit and no part of its net earnings shall inure to the benefit of any private person.



Note: Authority cited: Section 44520, Division 27, Health and Safety Code. Reference: Section 44520, Division 27, Health and Safety Code.


s 8040. Small Business Financing Program.



Note: Authority cited: Section 44520, Division 27, Health and Safety Code. Reference: Sections 44520 and 44537.5, Division 27, Health and Safety Code.


s 8041. Small Business Assistance Fund Established.
The Authority hereby establishes the Small Business Assistance Fund to assist small businesses to obtain pollution control or other financing as authorized by Health and Safety Code Section 44548.



Note: Authority cited: Section 44520, Division 27, Health and Safety Code. Reference: Section 44548, Division 27, Health and Safety Code.


s 8042. Eligibility for Assistance.
(a) An applicant, to be eligible for assistance, shall meet the following criteria:
(1) It shall be a small business as defined in Section 8020.
(2) It shall seek financing for a project that complies with the Act (commencing with Health and Safety Code Section 44500).
(3) In connection with assistance in accordance with Section 8043 of this article, it shall seek financing that is no less than $500,000.
(4) It shall demonstrate a financial capability to make debt service payments and shall provide such collateral security (in the form of deeds of trust, security agreements, reserves, third party guarantees or other methods) as may be required by the holders of the bonds, the lender in a conventional loan, and the Authority as guarantor.
(b) An applicant shall receive assistance, provided sufficient funds are available, when the following conditions are satisfied:
(1) The Authority has accepted the applicant's request for financing pursuant to Section 8032.
(2) The Authority has determined that the applicant is eligible pursuant to subdivision (a) of this section.
(3) The Authority issues bonds to finance the applicant's project or the Authority approves a guarantee of a conventional loan which will finance the applicant's project.



Note: Authority cited: Section 44520, Division 27, Health and Safety Code. Reference: Section 44548, Division 27, Health and Safety Code.


s 8043. Assistance.
In addition to other assistance which the Authority shall be authorized to provide in accordance with this division:
(a) The Authority shall be authorized to provide any part or combination of the assistance described below, but the Authority shall not be required to provide any particular form of assistance to any applicant. The Authority shall be authorized to provide the form or forms of assistance that, in its judgment, will most effectively assist the applicant to (i) achieve financing for the project; (ii) obtain a bond rating of "A" from a national bond rating service if bonds are issued publicly; and (iii) obtain an effective interest rate for all or a portion of the term of the financing which, in the Authority's judgment, is comparable at the time of financing to the prevailing market rates which would be paid by larger businesses for similar types of financing (but for any conventional loan not lower than the "prime rate" then prevailing):
(1) Pay for the reasonable costs of issuing bonds or obtaining conventional loans. For bond issues, these costs include bond counsel fees, underwriter or placement agent fees or discount and related expenses, printing fees, fees due to other state agencies, accounting fees, consultant's fees, and other expenses directly related to the issuance of bonds that are normally paid from the proceeds of a bond issued at the time of closing. For conventional loans, these costs include counsel fees, loan origination fees, consultant's fees, and other costs normally incurred in obtaining a commercial loan. The costs of issuing bonds or obtaining conventional loans shall not include expenses incurred by the applicant for other attorney fees, staff time, or other expenses related to the application for financing.
(2) Provide financial assistance to reduce the annual fees or premium for a letter of credit, surety bond, insurance policy, or other credit enhancement.
(3) Guarantee to the bond holder, conventional lender or provider of a letter of credit, surety, insurance policy, or other credit enhancement all or a portion of the indebtedness; provided, however, that in no event shall the aggregate amount of such quarantees outstanding at any time with respect to any applicant exceed $2,000,000.
(4) Provide financial assistance to reduce the interest rate on conventional loans or bonds by not more than two percent (2%).
(b) The Authority shall waive the fees it charges pursuant to Section 8034 for all applicants meeting the conditions contained in Section 8042(b).
(c) The Authority alone is authorized to approve assistance. The commitment to provide assistance shall be valid only when it is included in a written contract executed by both the Authority and applicant or group of applicants.



Note: Authority cited: Section 44520, Division 27, Health and Safety Code. Reference: Section 44548, Division 27, Health and Safety Code.


s 8044. Small Business Loans.
In connection with small business loans made in accordance with California Code of Regulations, Title 10, Chapter 6.81 (commencing with Section 4610) adopted by the California Department of Commerce pursuant to California Health and Safety Code Section 44520(b), the Authority acknowledges said regulations and shall undertake to perform its obligations set forth therein. If any inconsistency exists between said regulations and this article, the provisions of said regulations shall apply. In addition, in connection with such small business loans, the following shall apply:
(a) Notwithstanding anything in Section 8043 to the contrary, the Authority shall be authorized to establish the loan guarantee percentage it deems necessary to facilitate the provision of such small business loans.
(b) The Authority shall be authorized to waive fees it charges pursuant to Section 8034 for all applicants approved for such small business loans.



Note: Authority cited: Section 44520(b), Health and Safety Code. Reference: Sections 44533(b) and 44548(c), Health and Safety Code; Section 15335, Government Code.


s 8050. Definitions.
The following definitions shall govern construction of Article 5 and Article 6.
(a) "Agency" means a public entity authorized under federal, state or local law to issue an Authorization in connection with Pollution Control Requirements.
(b) "Applicant" means an entity applying for a Loan.
(c) "Application" means the information referred to in Section 8054.
(d) "Assessment Report" means a report prepared by a Coordinator pursuant to Section 8053(c) of these regulations.
(e) "Authority" means the California Pollution Control Financing Authority, organized and existing under and by virtue of Division 27 (commencing with Section 44500) of the California Health and Safety Code.
(f) "Authorization" means a permit, order or other authority to construct or authority to construct and operate a Project.
(g) "Bonds" means any series of bonds, notes or other evidence of indebtedness issued by the Authority, a portion of the proceeds of which are used to fund Loans.
(h) "Borrower" means an Applicant whose Loan has been approved and who has executed a Loan Agreement.
(i) "Contractor" means an entity who has contracted with the Authority to undertake loan packaging, servicing and related activities pursuant to these regulations.
(j) "Coordinator" means an entity which receives and processes applications and disburse funds pursuant to these regulations. The Coordinator for any given Application shall be authorized to be either the Authority's staff or a Contractor, if one or more have contracted with the Authority, that receives the Applicant's complete and signed Application pursuant to Section 8053 of these regulations.
(k) "Eligible Costs" means reasonable and necessary Project costs associated with the following:
(1) Acquisition or construction of the Project, including labor installation and construction costs if such installation and construction are performed by a contractor (as defined in Section 7026 of the California Business and Professions Code) licensed in accordance with Sections 7065 through 7077 of the California Business and Professions Code.
(2) Design, engineering, architectural, consulting, real estate appraisal, legal and other related costs and fees necessary to the Environmental Audit and to the acquisition or construction of the Project.
(3) Preparation costs, including obtaining acquisition or construction cost estimates, preliminary design and engineering work, planning costs and any other expense reasonably required in order to obtain an Authorization.
(4) The Loan fees and Environmental Audit.
(l) "Environmental Assessment" means an assessment of environmental conditions made pursuant to Title 14, Division 11, Article 6, Section 8060 of the California Code of Regulations.
(m) "Environmental Audit" means an investigation into the Applicant's production operations and its compliance with federal, state and local environmental laws, regulations and rulings.
(n) "Hazardous Material" means a hazardous waste, hazardous material, toxic substance, solid waste, water pollutant, air pollutant, air contaminant or related material, including any pesticide or petroleum products, waste, substance, pollutant or contaminant that is or becomes the subject of regulation by any federal, state or local governmental authority or agency with respect to air, water or soil quality.
(o) "Loan" means a loan made in accordance with the procedures set forth in Article 5 and Article 6.
(p) "Loan Agreement" means any agreement for a Loan entered into between a Borrower and the Coordinator.
(q) "Pollution Requirements" means any law, rule or regulation by an agency pertaining to Hazardous Material.
(r) "Project" means the equipment, control technology, production practice or facility for which a Loan is being sought and that is designed to either bring the Applicant into compliance with Pollution Requirements or to reduce Hazardous Material emission or generation.
(s) "Security" means any collateral pursuant to a Loan Agreement. No Loan Agreement shall include the following types of collateral:
(1) Raw land, or land with buildings that will require demolition in order to make use of the property;
(2) Land or buildings contaminated by Hazardous Materials;
(3) Real property located outside California; and
(4) Existing liens on real property exceeding seventy-five percent (75%) of the appraised value. Any appraisal submitted in connection with these regulations shall be no more than six months old at the time of submission.
(t) "Small Business" means that term as defined in Title 4, Division 11, Article 2, Section 8020 of the California Code of Regulations.



Note: Authority cited: Section 44520(a), Health and Safety Code. Reference: Sections 44533(b) and 44548, Health and Safety Code.


s 8051. Eligibility.
An Applicant shall be eligible for a Loan when the Coordinator determines that:
(a) the Applicant is a Small Business that has been operating and engaged in substantially the same activity for a minimum of three (3) years prior to the time the Application is submitted to the Coordinator;
(b) The Applicant demonstrates the ability to repay the Loan from operational cash flow.
(c) Adequate Security exists to secure the Loan on the terms and conditions required by these regulations and agreed to by the Applicant.
(d) The Loan is requested to fund a Project located in California.
(e) The Applicant has an after tax net income in at least two (2) of the last three (3) full years of operation.



Note: Authority cited: Section 44520(a), Health and Safety Code. Reference: Sections 44533(b) and 44548, Health and Safety Code.


s 8052. Loan Terms.
The terms and conditions of a Loan shall include all of the following:
(a) An interest rate not to exceed one percent (1%) greater than the net interest cost on the Bonds issued in connection with a Loan, or if no bonds are so issued, not to exceed five percent (5%) greater than the interest rate payable at the time of a Loan on moneys in the state's surplus money investment fund. As used in this subsection, "net interest cost" is determined by dividing the total interest payments for the Bonds (reduced by any premium or accrued interest and increased by any discount) by the product of the issue price (which is the par amount of the Bonds less any discount and increased by any premium) and the weighted maturity of the issue (which is the average maturity of the issue weighted to reflect the dollar amount of each particular maturity).
(b) A maximum Loan amount no greater than seven hundred and fifty thousand dollars ($750,000).
(c) A minimum Loan amount no less than ten thousand dollars ($10,000).
(d) A Loan term not to exceed eight (8) years; provided that no term shall exceed the final maturity of the Bonds.
(e) The Loan is fully amortized.
(f) A Loan fee of two percent (2%) of the amount of the Loan or five hundred dollars ($500), whichever is greater, to be paid to the Authority.
(g) Late charges in the event of a default.
(h) Any other provision agreed to by the parties.



Note: Authority cited: Section 44520(a), Health and Safety Code. Reference: Sections 44533(b) and 44548, Health and Safety Code.


s 8053. Application Availability, Submission and Coordinator Review.
(a) Applications shall be available from the Authority's staff and from any Contractor. Applicants can obtain a list of Contractor(s) or a copy of the Application by contacting the Authority's staff at the following address: California Pollution Control Financing Authority, 915 Capital Mall, Room 466, Sacramento, California, 95814 Attention: CLEAN Program, or by phoning (916) 654-5610. The Application shall contain the information set forth in Section 8054. The Applicant shall submit one (1) complete and signed Application to a Coordinator.
(b) The Coordinator shall review each Application in accordance with Section 8051. If the Coordinator determines that the Application is incomplete, the Coordinator shall provide assistance to the Applicant in completing the Application. No later than sixty (60) days following receipt of a complete Application, the Coordinator shall either:
(1) Notify the Applicant that the Application is ineligible; or
(2) Notify the Applicant that the Application is eligible.
(c) When the Coordinator acts pursuant to (b)(2) of this Section, it shall ensure that the Application is complete, and, shall deliver or mail to the Authority the original Application and an Assessment Report. The Assessment Report shall consist of the following:
(1) Name and address of Applicant and any guarantors of the Loan;
(2) Loan amount;
(3) Description of the Project;
(4) Monthly payment, loan fee and estimated interest rate;
(5) Primary and secondary repayment sources;
(6) Security;
(7) Description of Applicant's business (including location);
(8) Discussions of Applicant's management structure and qualifications;
(9) Financial analysis addressing Applicant's ability to repay the Loan;
(10) Evidence that Applicant is a Small Business;
(11) Discussion of potential environmental risks in connection with the Project; and
(12) Loan conditions and requirements.



Note: Authority cited: Section 44520(a), Health and Safety Code. Reference: Sections 44533(b) and 44548, Health and Safety Code.


s 8054. Application Content.
An Application shall include all of the following:
(a) The Applicant name, address, telephone number, federal tax identification number, type of business, Standard Industrial Classification Number as set forth in Standard Industrial Classification Manual, 1987, United States Office of Management and Budget, and the date the business was established.
(b) The Applicant owner(s), including the Applicant owner's spouse's name if such spouse is an owner, and guarantor name, if any, with the following information for each such owner and guarantor: business telephone number, home street address, employer's name and address, amount of time at current employment and position held. "Owner" for purposes of this section means any person holding a beneficial interest of ten percent (10%) or more of the stock issued by, or other ownership interest in, the Applicant.
(c) Information regarding the Project for which funding is being requested, including:
(1) A description of the Project including its useful economic life, the estimated construction period, components, costs and whether it is primarily intended to meet pending Pollution Requirements or to reduce Hazardous Material generally.
(2) The Project location.
(3) A copy of the Authorization, if available, and a copy of the application for the Authorization and any other materials submitted to an Agency in connection with the Authorization.
(d) Information the Applicant deems sufficient to demonstrate that the Applicant is able to provide adequate Security and to repay the Loan, including tax returns, history of any insolvency, status of any tax audits or lawsuits and the existence and solvency of any guarantors.
(e) The proposed Loan amount and term.
(f) The Applicant's financial statement for the most recent fiscal year and financial statements for the previous three (3) fiscal years.
(g) A financial certification form (Financial Statement Certification, 3/92 revision) signed by each person or entity furnishing any financial statement. The form consists of the following statement:
"The attached financial statement of the undersigned dated _____ is hereby furnished to you for the purpose of procuring and establishing credit from time to time with you and is to be regarded as a complete and truthful statement of the undersigned's financial condition on the date indicated.
"The undersigned authorizes you (1) to make inquiries about the content of the attached financial statement, including contacting credit reporting agencies and (2) to provide credit information about the obligations of the undersigned to credit reporting agencies or in response to other inquiries. Signed: __________ Date __________."
(h) The signature of Applicant owner(s) to the Application, with the following statement:
"I represent and declare that the information provided in this application is true and a correct statement of my current financial condition. Any existing or threatened litigation, claim or circumstance which might reasonably be expected to affect my condition in the future is fully described below or in an attached statement.
"I will immediately notify you in writing if there is a material change in my financial condition. The absence of such notification shall constitute a new and continuing affirmation of my financial condition as described, upon which you may continue to fully rely.
"I agree that present and future obligations to you are authorized to be made immediately due and payable, at your sole discretion, if (1) I, or any guarantor of any of my obligations, at any time discontinues business, becomes insolvent, enters into bankruptcy or dies, (2) a writ of attachment, garnishment, execution or other similar legal process is issued against my property, (3) any act for the collection of delinquent taxes is taken against me, (4) any representation to you by me or a guarantor of my obligations proves to be misleading or untrue, (5) I fail to notify you of any material change in my financial condition or there is a materially adverse change in my financial condition, including any change in Security, (6) I sell or transfer any interest in my current business, or (7) any other action or condition for which present or further obligations shall be authorized to be made immediately due and payable and that has been agreed to or not objected to by me, occurs or is met.
You are authorized to verify the information contained in this application with any third party.
I understand that my spouse, if any, is not required to be a borrower or a guarantor unless he or she also is an owner of the business.
I have reviewed the above statement and understand the foregoing representations and covenants. Date __________Signature __________."
(i) If Security includes real property, a legal description of such property, an appraisal of the property, a preliminary title report and if the property is other than residential, four (4) units or less, a fifty (50)-year recorded document guarantee. The title report must utilize the American Land Title Association ( "ALTA") Loan Policy, revision 1987, or the California Land Title Association Standard Coverage Policy, revision 1988, and each must contain ALTA endorsements 100 and 101. The company issuing the title policy and document guarantee must be licensed by the California Department of Insurance to issue insurance in California. If the property is zoned and used as residential for four units or less, the appraiser must be licensed by either the American Institute as a Single Family Real Estate Appraiser or licensed by the California Office of Real Estate Appraisers. All other real property must be appraised by an individual licensed by the American Institute as a Member of the American Institute or certified by the California Office of Real Estate Appraisers.
(j) If Applicant leases the facility where the Project will be located, a copy of the lease for the facility.
(k) If Applicant has subsidiaries or affiliates whose financial statements are not otherwise consolidated with those of the Applicant, a current financial statement from each such subsidiary or affiliate for the most recent fiscal year.
( l) If the Loan amount exceeds two hundred and fifty thousand dollars ($250,000), Applicant financial projects for the eighteen (18)-month period following Loan approval.
(m) If projected Project costs exceed the requested Loan amount, proposed sources of funding for such additional costs.
(n) A completed Environmental Assessment.



Note: Authority cited: Section 44520(a), Health and Safety Code. Reference: Sections 44533(b) and 44548, Health and Safety Code .


s 8055. Environmental Audit.
The Coordinator shall be authorized to undertake or cause to be undertaken an Environmental Audit, including an Environmental Assessment, in connection with the Applicant and Applicant facilities where the Project is to be located and any other non-residential real property or other facility to be used as Security. The costs of such Environmental Audit shall be authorized to be paid by the Applicant or in such other manner as is agreed to by the Applicant.



Note: Authority cited: Section 44520(a), Health and Safety Code. Reference: Sections 44533(b) and 44548, Health and Safety Code.


s 8056. Coordinator Recommendation.
(a) The Coordinator shall prepare a loan summary which shall summarize the Application, Environmental Audit and Assessment Report and shall include a section stating whether the Application is eligible, and list the proposed terms, including proposed Security, and special conditions of the Loan. The summary also shall list the percentage of the Loan which will be used to fund a Project where the Agency is the South Coast Air Quality Management District.
(b) When the Coordinator has received a complete Application, has completed the Assessment Report pursuant to Section 8053(c), has prepared a loan summary pursuant to Section 8056(a), and has received an Environmental Audit described in Section 8055 (if authorized or undertaken by the Coordinator), then the Application File is complete.
(c) Within ten (10) days of when an Applicant's Application File becomes complete as described in Section 8056(b), the Coordinator shall deliver or mail a letter (i) to the Authority and (ii) to the Applicant, stating that either:
(1) The Coordinator determined that the Application was eligible for further Authority review, and that the Application has been forwarded to or is being reviewed by the Authority; or
(2) The Coordinator determined that the Application was ineligible for specified reasons, and that the Applicant can appeal the decision to the Authority, pursuant to Section 8057(b).



Note: Authority cited: Section 44520(a), Health and Safety Code. Reference: Sections 40448.6, 44533(b) and 44548, Health and Safety Code.


s 8057. Authority Approval.
(a) Upon receipt of a letter from the Coordinator pursuant to Section 8056, the Authority shall be authorized to approve the Application when:
(1) It received the recommendation to that effect from the Coordinator pursuant to Section 8056(c) or when it approves an appeal pursuant to Section 8057(b);
(2) The Environmental Audit supports or does not materially adversely affect the decision to make the Loan; and
(3) Funds are available.
(b) If the Coordinator has determined that an Application is not eligible, the Applicant may appeal by filing a written appeal with the Authority. The appeal must be received by the Authority not later than twenty (20) days from the date stated on the Section 8056(c)(2) letter and must address each of the issues set forth in the letter. The Authority shall review the appeal and deliver to the Coordinator a written decision within thirty (30) days following the Authority's first regularly scheduled meeting following receipt of the appeal. In making its determination, the Authority shall review the written appeal, Application, Environmental Audit, Assessment Report and Coordinator recommendation (which materials shall be supplied to the Authority by the Coordinator). There are no further administrative appeals following this decision.
(c) Where any of the conditions and requirements in subsection (a) have not been met, the Authority shall deny the Loan request and inform the Coordinator with respect to the specific actions, if any, the Applicant must take to reapply.
(d) No later than forty-five (45) days from the date upon which the Coordinator delivers or mails the letter pursuant to Section 8056(c), the Coordinator shall notify the Applicant of the decision, along with any explanation required by subsection (c); provided, however, that in the case of an appeal, the Applicant shall be notified not later than twenty (20) days following receipt by the Coordinator of the written decision of the Authority made pursuant to Section 8057(b). If the Loan is approved, the notification shall consist of a letter committing the Authority to provide Loan funds so long as the Applicant strictly complies with the terms and conditions contained therein.
(e) The commitment letter described in subsection (d) shall include the following:
(1) Borrower's and any guarantor's name(s).
(2) Loan amount and term.
(3) Interest rate and loan fee.
(4) Disbursement process, including a statement that Loan proceeds shall be disbursed on a reimbursement basis.
(5) Proposed Security, together with appropriate method for placing a lien on and insuring same.
(6) A requirement that the Applicant execute environmental indemnity agreements in favor of the Authority, the State of California, and the Contractor, if any, fully indemnifying against loss or damage due to Hazardous Material. Such indemnity shall not be secured by the deed of trust or other Loan documents.
(7) Insurance requirements.
(8) Conditions and covenants.
(9) Prepayment conditions, if any.
(10) The date when the commitment expires.
(11) A statement that the Authority, by and through the Coordinator, reserves the right to modify or cancel its commitment upon failure of the Applicant to execute a Loan Agreement that includes all of the terms and conditions set forth in the letter of commitment, or if it becomes aware of any matter which, if known at the time of Loan review or approval, would have resulted in the Application not being approved. Such matters include:
(A) A determination that the Application was prepared incorrectly, contains incorrect information or omits required information.
(B) Business circumstances that would negatively affect the Applicant's ability to rely or collateralize the Loan.
(f) If the Authority approves the Application, the Authority or the Coordinator shall be authorized to enter into a Loan Agreement that embodies the terms specified in the commitment letter described in subsection (e).
(g) If the Authority denies the Application, the Applicant shall have no right to administratively appeal the decision, but may reapply for a Loan at any time.
(h) The Authority shall be authorized to give priority to Applications for Loans for Projects intended to meet Pollution Control Requirements pending or enacted but not yet effective.



Note: Authority cited: Section 44520(a), Health and Safety Code. Reference: Sections 44533(b) and 44548, Health and Safety Code.


s 8058. Loan Disbursement.
Following the execution of a Loan Agreement, compliance with all conditions precedent to disbursement contained in the Loan Agreement and the issuance of an Authorization, the Coordinator shall disburse funds as follows:
(a) The Borrower shall sign and submit to the Coordinator invoices from entities providing materials and services for Eligible Costs covered by the Loan Agreement.
(b) Upon receipt of the signed invoice, the Coordinator shall authorize the disbursement of Loan funds to the Borrower.



Note: Authority cited: Section 44520(a), Health and Safety Code. Reference: Sections 44533(b) and 44548(c), Health and Safety Code.


s 8060. Environmental Assessment.
An environmental assessment shall consist of completion of the following form (Revision 3/92): Applicant: Applicant's address: Address of property for which this Environmental Assessment is being completed (property which shall be the security for loans, or if none, property where the project will be located) (the "Subject Property"):
List the street address, use & ownership interest in any other property owned by Applicant (e.g. 100 Main Street, Los Angeles, 3 year rental as warehouse space):
Name(s) of Individual(s) completing this questionnaire, their position(s) with the Applicant, the responsibilities and duties in this position(s), and their tenure with Applicant:
The following questions are necessary to provide the California Pollution Control Financing Authority (the "Authority"), its staff, and/or any entities contracting with the Authority in connection herewith (the "Coordinator") with information concerning the environmental condition of the Subject Property. The Authority or the Coordinator will require the person(s) completing this statement to certify that the statement is true and constitutes an accurate account of all known environmental matters related to the Subject Property and its vicinity. The Authority or the Coordinator will rely on these answers as knowing representations of the Subject Property's condition.
The questions should be answered by one or more persons who are most knowledgeable about the Subject Property. Such persons will be expected to conduct a "reasonable inquiry." The term "reasonable inquiry" shall include a thorough examination of the Subject Property and all property records in the Applicant's possession or reasonably available to the Applicant, as well as all matters into which Applicant has inquired for any purpose, or has had the right or duty to inquire into, supervise or monitor. "Reasonable inquiry" shall not require an environmental audit or the hiring of a consultant to respond to these questions or a title search of County property records.
The Authority or the Coordinator may conduct an independent investigation of the answers supplied in this statement at the Applicant's expense. If such an investigation reveals problem areas not disclosed in this statement, the loan decision may be delayed.
The Authority's or the Coordinator's provision of or reliance on this statement shall not constitute a commitment to lend funds, nor shall it limit the Authority's or the Coordinator's right to conduct a site investigation at the Applicant's expense prior to issuing a loan commitment.
The Applicant should disclose all known existing or potential environmental issues when answering the following questions. The Authority or the Coordinator is aware that businesses which will apply for the loan program generate Hazardous Material. When fully disclosed, the existence of Hazardous Material on the Subject Property will not necessarily result in an automatic loan denial. The Authority or the Coordinator, in its sole discretion, shall consider other factors as listed in the regulations when determining whether the proposed loan meets the program's goals and the Authority's or the Coordinator's acceptable liability risk.
Exhibit A contains definitions of the terms used in this statement which will aid the Applicant in determining the scope of each question.
If insufficient space is provided for your response, provide an attachment to the questionnaire and label the attachment with the number of the question you are continuing to answer.
A. SCOPE OF APPLICANT'S "REASONABLE INQUIRY"
1. Have you conducted an investigation of the Subject Property, including any records or employees' knowledge concerning the Subject Property in preparing your responses to these questions?
Yes No
If yes, state how this inquiry was conducted and what issues and sources were examined: B. PROPERTY INFORMATION
1. Current and Former Owners of and Uses on the Subject Property and Vicinity:
(a) Give the name of the present owner and state the current use of the Subject Property: Year acquired:
(b) Do you know who has owned the Subject Property prior to the current owner?
Yes No
If "yes," state the names of all such former owners, the approximate dates of their ownership and their uses of the Subject Property (note especially any manufacturing or industrial uses, and any uses which required the use, storage, or disposal of Hazardous Material): (c) Are there or have there been tenants or easement holders on the Subject Property? Yes No Do not know
If yes, state the names of present and former tenants, easement holders, etc. and their uses of the Subject Property (note especially any manufacturing or industrial uses, and any uses which required the use, storage, or disposal of Hazardous Material): (d) Are there or have there been any manufacturing or industrial activities or any activities involving the use, storage, or disposal of Hazardous Material, pesticides or petroleum products within 1500 feet from the borders of the Subject Property?
Yes No Do not know
If yes, please describe:
(e) What is the current zoning for the Subject Property?
(f) Do you know any prior zonings of the Subject Property?
Yes No
If yes, please list the prior zonings and the dates each such zoning was in effect.
(g) Are you aware of any previous environmental assessments, audits or inspections of the Subject Property by any government entity, consultant or other party? Yes No
If yes, please describe and attach as Attachment A any reports, studies, plans or other documents related thereto.
2. Current or Proposed Use of Subject Property
(a) Please describe all current and proposed activities which Applicant intends to conduct on the Subject Property:
(b) Is Hazardous Material handled, used, stored, manufactured, treated, released or disposed of in the course of these activities?
Yes No
If yes, specify for each substance how it is used, stored, manufactured or treated (as applicable), and in what approximate quantity. Attach as Attachment B a list of such substances, copies of all applicable permits, safety data sheets, and copies of Hazardous Material manifests.
(c) Does the activity on the Subject Property require equipment cleaning or degreasing or removal of residues of Hazardous Material from equipment?
Yes No
If yes, list the substances and wastes, and describe how the substances and wastes of this cleaning or removal process are disposed of?
(d) Please briefly describe the process flow of Applicant's operations at the Subject Property (e.g. raw materials unloaded at rear loading dock, formed into widgets inside the main building, finished widgets transported off site by trucks at front loading dock, raw material scrap stored in bins & picked up by trucks transporting materials to recycling center). Identify all points at which Hazardous Material is handled, accumulated, stored, treated, transferred, released or disposed of. Attach as Attachment C a process flow diagram.
3. Physical Description of Property
(a) Please describe all structures on the Subject Property (including approximate age) and attach as Attachment D a facility map:
(b) Are there, or have there been any tanks, sumps, ponds, lagoons and other containments (whether under or above ground, inside or outside of any structure) on the Subject Property? (continued)