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(continued)
Yes No
If yes, please attach as Attachment E a list describing such containments (including their size, age, and location) and, where possible, list all substances known to be (or have been) stored or deposited therein.
(c) How and how often are these containers and storage areas checked for leaks or spills? For those containments no longer in use, describe how the containment was closed and attach as Attachment E all supporting documentation.
(d) Have any barrels, cans, bags or other containers which have at any time contained Hazardous Material (whether empty or not) been stored or discarded on the Subject Property (whether outside, buried or within a structure)?
Yes No Do not know
If yes, please describe and list methods and location of storage and disposal:
(e) Are there any refuse, storage or other disposal areas on the Subject Property?
Yes No
If yes, please describe and locate on the Attachment D facilities map such facilities and describe the procedures for storage, collection, and disposal of refuse utilized at the facility:
(f) How are empty containers and other garbage from activities on the Subject Property disposed of?
(g) Do any of the structures, paved areas and other work areas contain floor drains or other direct connections to drainage areas, sump, septic systems, or public sewer facilities?
Yes No
If yes, please describe the drainage system, and the manner in which it is currently used in the Applicant's operation:
4. Building Materials & Components
(a) Were any of the structures on the Subject Property constructed, remodeled, or renovated between the years of 1920 and 1980? Yes No If yes, please describe the construction, remodeling or renovation:
(b) Do any of the structures or improvements on the Subject Property contain asbestos materials (whether incorporated in structures or stored on site) such as ceiling tiles, flooring, insulation, furnace protection, fireproofing materials, duct tape, etc.?
Yes No Do not know
If yes, please describe (including age, condition and location):
(c) Has an asbestos expert or industrial hygienist inspected the Subject Property?
Yes No
If yes, attach the report as Attachment G.
(d) Are there any transformers, capacitors or other electrical equipment in use or stored on site?
Yes No Do not know
If yes, please list:
C. Regulatory Information & History
1. Are there any permits or variances required for the waste or wastewater discharge arising from the current or proposed activities on the Subject Property?
Yes No Do not know
If "yes" please list permit or variance number, agency, date of issuance, date of expiration, if any, and attach a copy as Attachment H:
2. Are there any permits or variances necessary for the air emissions caused by current or proposed activities on the Subject Property?
Yes No Do not know
If yes, please give permit number, agency and date of issuance, date of expiration, if any, and attach a copy as Attachment I:
3. Are there any permits or variances necessary for underground tanks, sumps or other containments on the Subject Property?
Yes No Do not know
If yes, please list permit or variance number, agency and date of issuance, date of expiration, if any, and attach a copy as Attachment J:
4. Are any permits or variances necessary for Hazardous Material treatment, storage or disposal activities undertaken at the Subject Property?
Yes No Do not know If yes, please list permit number, agency and date of issuance, date of expiration, if any, and attach a copy as Attachment K:
5. Are any other permits or variances necessary relative to the use, storage, handling, transportation or disposal of chemicals or other substances on the Subject Property?
Yes No Do not know
If yes, please list permit number(s), agency(ies) and date(s) of issuance, date of expiration, if any, and attach a copy as Attachment L:
6. Has any government agency issued any letter, notice or verbal communication indicating that it intended to investigate or seek information concerning environmental matters relating to the Subject Property?
Yes No Do not know
If yes, please specify and attach a copy as Attachment M:
7. Has any Hazardous Material ever been spilled, deposited, leaked, leached, disposed of or otherwise placed on or in the Subject Property?
Yes No
If yes, please specify, and detail response and cleanup activities undertaken including any governmental agencies contacted, and attach as Attachment N copies of any reports, studies, plans or other documents generated:
8. Is the Subject Property or any activity conducted thereon in violation of or subject to penalty under any law, ordinance, rule or regulation relating to Hazardous Material, or the protection of the environment?
Yes No
If yes, please specify and explain:
9. Has the Subject Property been designated, listed or identified in any manner by the United States Environmental Protection Agency (the "EPA") or any other governmental agency as a Hazardous Material disposal or removal site, superfund or cleanup site or candidate for removal or closure pursuant to any federal, state, or local law? Yes No
If yes, please describe:
Attach as Attachment O copies of any warnings, citations, notices of violation, enforcement actions and administrative and judicial complaints or orders, and correspondence related to any Hazardous Material or environmental law or regulation.
10. Are you aware of any litigation or threatened litigation pertaining to the Subject Property?
Yes No
If yes, please describe and attach as Attachment P a copy of any pleading:
E. Applicant Information:
For each Applicant, and each enterprise involved in operations on the Subject Property, list the following:
1. EPA identification numbers:
2. Ongoing or threatened environmental cleanup activities for which the Applicant is or may be subject to lawsuit, demand, liability, or responsibility for the conduct of cleanup or payment of cleanup costs:
(c) List all related businesses of the Applicant. As used herein, the term "related" means that the Applicant owns 51% of another business, or another business owns 51% of the Applicant.
As the present owner of the Subject Property or an interest therein, or as an officer or as a general partner of the present owner of the Subject Property (or the duly authorized representative of such owner), the undersigned, and each of them, individually certifies that he or she is familiar with the Subject Property and with all of the operations presently conducted on the Subject Property, has made a reasonable inquiry into the present and former uses and activities conducted on the Subject Property, the present and former uses and activities conducted within the vicinity of that property, and all other matters relevant to a full disclosure of all environmental concerns and issues relative to the Subject Property, and that, to the best of the knowledge, information and belief of the undersigned, the information disclosed above is complete, true and correct. The undersigned acknowledges that the Coordinator intends to rely upon the disclosure made above or attached hereto in determining whether and on what terms it will make a loan to Applicant. __________ __________ __________ __________ APPLICANT By: __________ __________ __________ Title: __________ __________ __________ Date Signed: __________ __________
Exhibit A

1. The term "Hazardous Material" shall have the meaning ascribed thereto to Title 10, Chapter 6.81, Section 8050(m) of the California Code of Regulations.
2. The term "permit" shall include any permit, registration, certification or other filing or action which must be obtained from, or filed with any government agency, or is otherwise required in order for the applicant for a loan to conduct operations, or own or operate any equipment or facility.
Exhibit B

The assessment asks for several attachments. Please clearly identify all attachments, and circle the below letters which correspond to the attachments enclosed. The descriptions are merely for reference, the full description of materials to be attached is listed in the assessment itself.
Attachment Assessment Description
A B.1.(g) Previous environmental
assessments
B B.2.(b) List of hazardous substances
C B.2.(d) Process flow diagram
D B.3.(a) Facility map
E B.3.(b) Containment list
F B.3.(c) Closed containment
documentation
G B.4.(c) Asbestos reports
H C.1. Waste or wastewater
discharge permits
I C.2. Air emission permits
J C.3. Underground tank permits
K C.4. Hazardous waste permits
L C.5. Chemical permits
M C.6. Government Agency
environmental
correspondence
N C.7. Release onto Subject Property
O C.9. Government listing of
Subject Property
P C.10. Litigation




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


s 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) "Early Stage Loan" means each of the first $500,000 of Qualified Loan made by a Participating Financial Institution.
(c) "Executive Director" means the Executive Director of the California Pollution Control Financing Authority, or his or her designee from time to time.
(d) "Fees" means a non-refundable fee, agreed to by the Participating Financial Institution and the Borrower, of no less than 2 percent and no more than 3-1/2 percent of the principal amount of the Qualified Loan which the Borrower shall be required to pay to the Participating Financial Institution for deposit in the Loss Reserve Account, together with an equal, matching amount which the Participating Financial Institution shall deposit in the Loss Reserve Account. The Borrower's share of the Fees may be paid from loan proceeds or in accordance with subdivision (f) of this section and Section 8078.
(e)(1) "Financial Institution" means a federal or state-chartered bank, savings association, credit union, not-for-profit community development financial institution certified under Part 1805 (commencing with Section 1805.100) of Chapter XVIII of Title 12 of the Code of Federal Regulations, or a consortium of the foregoing entities. A consortium of such entities may include a nonfinancial corporation, if the percentage of capitalization by all nonfinancial corporations in the consortium does not exceed 49 percent.
(2) "Financial Institution" also includes a lending institution that has executed a participation agreement with the Small Business Administration under the guaranteed loan program pursuant to Part 120 (commencing with Section 120.1) of Chapter 1 of Title 13 of the Code of Federal Regulations and meets the requirements of Section 120.410 of Chapter 1 of Title 13 of the Code of Federal Regulations, and a small business investment company licensed pursuant to Part 107 (commencing with Section 107.20) of Chapter 1 of Title 13 of the Code of Federal Regulations.
(3) A financial institution described in paragraph (2) shall be domiciled or have its principal office in the State of California.
(f) "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 the Law and this Article, pays to a Loss Reserve Account the Matching Contribution and/or the portion of the Fees payable by the Borrower.
(g) "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.
(h) "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.
(i) "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 Section 8073.
(j) "Matching Contribution" means a contribution to a Loss Reserve Account of an amount equal to
(A) 100 percent of the combined amount of the Fees, or
(B) 150 percent of the combined amount of the Fees for
(1) a Qualified Loan to a Borrower in a Severely Affected Community or
(2) an Early Stage Loan; provided, however, that such contribution shall not in any case exceed 150 percent of the combined amount of the Fees.
(k) "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.
(l) "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.
(m) "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.
(n) "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.
(o) "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.
(p) "Program" means the Capital Access Loan Program for Small Businesses established pursuant to the Law.
(q) "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.
(r) "Qualified Business" means a Small Business Concern that meets both of the following criteria:
(1) It is a corporation, partnership, cooperative, or other entity, whether that entity is a nonprofit entity or an entity established for profit, that is authorized to conduct business in California.
(2) It has its Primary business location in California.
(s) "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 debt already held by the Participating Financial Institution other than a prior Qualified Loan enrolled under the Program, except to the extent of any increase in the outstanding balance.
(4) A loan, the proceeds of which will be used
(A) to provide any of the following facilities: any private or commercial golf course, country club, massage parlor, tennis club, skating facility (including roller skating, skateboard, and ice skating), racquet sports facility (including any handball or racquetball court), hot tub facility, suntan facility, racetrack, airplane, skybox (or other private luxury box), health club facility, facility primarily used for gambling or to facilitate gambling, or store whose principal business is the sale of alcoholic beverages for consumption off premises, 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, any religious facility or organization, escort service, nudist camp, gun club, shooting range or gallery; or
(B) 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.
(t) "Severely Affected Community" means any area classified as an enterprise zone pursuant to the Enterprise Zone Act, Chapter 12.8 (commencing at Section 7070) of Division 7 of Title 1 of the California Government Code; 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.
(u) "Small Business Assistance Fund" means a fund of that name created by the Authority.
(v) "Small Business Concern" means any person, company, corporation, partnership or entity that is classified as a small business pursuant to Section 3 of the Small Business Act (15 U.S.C. Sec. 631 et seq.) or any of the size standards set forth in Title 13, Code of Federal Regulations, Part 121, Subpart A, which are incorporated herein by reference, or any person, company, corporation, partnership or entity that (together with affiliates) employs no more than 500 employees.
(w) "Standards" means the criteria, limited to geographical area and/or type of business, to be used by an Independent Contributor in selecting businesses to assist through the Program.



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 and 44559.7, Division 27, Health and Safety Code.


s 8071. Application by Financial Institution.
(a) A Financial Institution seeking to participate in the Program will complete a registration application provided by the Authority.
The application shall include the following information:
(1) name of applicant Financial Institution.
(2) name, address and telephone number of contact person.
(3) combined capital and surplus as of the end of the Financial Institution's most recent fiscal year.
(4) number of lending branches.
(5) certification that the applicant Financial Institution is not subject to a cease and desist order or other regulatory sanction with the appropriate federal or state regulatory body, which would impair its ability to participate in the Program, and the name of that body.
(6) a full description of the board of directors, including number, race, ethnicity and gender of its members.
(7) the Financial Institution's rating from a nationally recognized credit rating agency which assesses the financial soundness and stability of financial institutions.
(8) the Financial Institution's agreement to follow the Program's procedures as set forth in the Law and this Article.
(9) the Financial Institution's agreement to permit an audit of any of its records relating to enrolled Qualified Loans, during normal business hours on its premises, by the Authority or its agents, and to supply such other information concerning enrolled Qualified Loans as shall be requested by the Executive Director.
(10) acknowledgment by the Financial Institution that the Authority and the State will have no liability to the Participating Financial Institution under the Program except from funds deposited in the Loss Reserve Account for the Participating Financial Institution.
(b) Upon receipt of a completed application, the Executive Director will within 10 days review and determine whether additional information is required, or whether the application is sufficient to permit the applicant to be a Participating Financial Institution. The Executive Director's decision whether an application is sufficient shall be final.
(c) A Participating Financial Institution shall be authorized to request the Authority to establish two or more Loss Reserve Accounts for such institution, so that the institution shall be able to allocate any Qualified Loan enrolled under Section 8072 to whichever Loss Reserve Account it designates. In such case, the definition of Early Stage Loan and Section 8074(f) shall be applied in the aggregate to all the Loss Reserve Accounts for each Participating Financial Institution.



Note: Authority cited: Sections 44520 and 44559.5(f), Division 27, Health and Safety Code. Reference: Section 44559.2, Division 27, Health and Safety Code.


s 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 10 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 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 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) Name, D/B/A (if any), address, telephone and fax number of the Borrower.
(2) Brief description of the Borrower's business and either the SIC Code(s) or the NAICS Code(s) applicable to such business.
(3) Brief description of the Borrower's regular activities and the amount of its annual revenues.
(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).
(6) Type of the Qualified Loan (e.g., line of credit, term loan, equipment loan).
(7) Date of the Qualified Loan.
(8) Interest rate applicable to the Qualified Loan.
(9) Term 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 refinancing, and if so, whether the prior loan was enrolled under the Program, and whether the amount of the loan was increased as part of the refinancing.
(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 Matching 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 Matching 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 that the loan is a Qualified Loan, and that the business receiving the Qualified Loan is a Qualified Business.
(18) Certification that the Qualified Loan is for a business activity that has its Primary economic effect in California.
(19) Certification that, upon request of the Executive Director, the Participating Financial Institution will provide information from the financial records of the Borrower, and that the Participating Financial Institution has obtained the consent of the Borrower to such disclosure.
(20) Certification that 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 Matching Contribution.
(21) Certification that the aggregate principal amount of the loan, together with all other Qualified Loans made by the Participating Financial Institution to the Borrower over the last three years (including all related entities among which a common enterprise exists), does not exceed $2,500,000.
(22) Certification that 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 from loan proceeds.
(23) Acknowledgment that the lending activities of the Participating Financial Institution are subject to safety and soundness standards as set forth in applicable federal banking regulations.
The Participating Financial Institution shall be authorized to base the information requested by subsections (4), (16), (17) and (18) above upon representations made to it by the Borrower; 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.
(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 all 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 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 10 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.
(g) Upon enrollment of a Qualified Loan, the Matching 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.
(h) The Participating Financial Institution shall notify the Authority within 60 days after any extension or renewal of any enrolled loan which does not increase the loan amount. If the amount is increased, a new loan enrollment form shall be submitted within such time, and Fees shall be transmitted or deposited pursuant to Section 8072(b)(2) based on the increased amount.
(i) The Participating Financial Institution shall notify the Authority of the work-out status on Qualified Loans for which extension/renewal or charge off status is not yet clear. The "Notification of Work-Out Status" form provided by the Authority shall be used to notify the Authority. The Participating Financial Institution shall have up to 240 days from such initial notification to inform the Authority of re-enrollment or charge off.



Note: Authority cited: Sections 44520 and 44559.5(f), Division 27, Health and Safety Code. Reference: Sections 44559.2 and 44559.4, Division 27, Health and Safety Code.


s 8073. Loss Reserve Accounts.
(a) Upon the Executive Director's acceptance of an application under Section 8071, the Authority shall establish a Loss Reserve Account for that Participating Financial Institution for the following purposes:
(1) to receive all Fees deposited by the Participating Financial Institution, Borrowers and/or Independent Contributors;
(2) to receive Matching Contributions deposited by the Authority and/or Independent Contributors; and
(3) to pay claims in accordance with Section 8074.
(b) The Loss Reserve Account shall, in the Authority's sole determination, be held by the Participating Financial Institution or by a Program Trustee.
(c) Any Loss Reserve Account held in a Participating Financial Institution shall be an interest-bearing demand account or deposit account at a banking institution, or a Money Market Fund approved by the Executive Director, or a combination thereof. The Loss Reserve Account shall be insured by the Federal Deposit Insurance Corporation, the National Credit Union Share Insurance Fund, or the Securities Investor Protection Corporation, as appropriate, to the extent permitted by law. The Authority shall not deposit any Loss Reserve Account with a Participating Financial Institution if:
(1) there are any charges by the Participating Financial Institution for the establishment or maintenance of the Loss Reserve Account at such Financial Institution; or
(2) at the time the Loss Reserve Account is established with the Participating Financial Institution, it has a rating below "75" from IDC Financial Publishing Inc.'s Bank Financial Quarterly, S&L-Savings Bank Financial Quarterly, or Credit Union Financial Profiles, or it has a rating below "11" from Sheshunoff Information Services Inc.'s Bank Quarterly or S&L Quarterly.
(d) All moneys in a Loss Reserve Account are property of the Authority (subject to the Participating Financial Institution's right to receive a portion of the remaining balance in the Loss Reserve Account upon its withdrawal from the Program pursuant to Section 8076 and subject to subsection (e) below). Interest or income earned on moneys credited to the Loss Reserve Account shall be deemed to be part of the Loss Reserve Account. The Executive Director shall be authorized to withdraw moneys from the Loss Reserve Account to offset administrative costs associated with the Program, provided that the Executive Director shall not be authorized to withdraw more than 50 percent of all interest or income credited to the Loss Reserve Account. The Executive Director shall be authorized to return to a Participating Financial Institution any fees improperly deposited in a Loss Reserve Account.
(e) Notwithstanding any other provision of this article, the Executive Director shall be authorized, with the approval of the applicable Participating Financial Institution, to assign, transfer, pledge or create security interests in all or a portion of any Loss Reserve Account to any other entity or entities (including a trustee of a securitization trust or trusts) in connection with the securitization of all or a portion of the Participating Financial Institution's loans enrolled in the Program.



Note: Authority cited: Sections 44520 and 44559.5(f), Division 27, Health and Safety Code. Reference: Sections 44559.3 and 44559.8, Division 27, Health and Safety Code.


s 8074. Claim for Reimbursement.
(a) A Participating Financial Institution shall notify the Authority within 30 days after it has charged off all or part of a Qualified Loan as a result of a default by the Borrower.
(b) A Participating Financial Institution shall be authorized to make a claim for reimbursement of a loss from the enrolled portion of a Qualified Loan prior to the liquidation of collateral, or to realization on personal or other financial guarantees or from other sources. A Participating Financial Institution may also defer, for a period not to exceed 180 days from the date of the charge off, at its sole discretion, making a claim for reimbursement, but still must inform the Authority of charge off status within 30 days.
(c) The Authority shall pay claims within 30 days of receipt of a completed claim request; provided, however, that the Executive Director shall be authorized to reject a claim if it is determined that the representations and warranties provided by the Participating Financial Institution pursuant to Section 8072 at the time of enrolling the Qualified Loan were false. The Authority shall be authorized, upon providing written notice to the Participating Financial Institution, to defer payment of claims up to an additional 30 days if the Authority requires more information in order to determine if the claim shall be paid.
(d) To make a claim, the Participating Financial Institution shall submit a claim form to the Authority which shall include the following information:
(1) Name and number of the Participating Financial Institution.
(2) Name, address and telephone number of contact person.
(3) Name of the business receiving the defaulted Qualified Loan.
(4) Amount and date of the Qualified Loan and the Authority's loan number.
(5) Date of default.
(6) Amount of default.
(7) Amount of claim and breakdown of components of the claim between principal, interest, and reasonable out-of-pocket expenses of collection or preservation of collateral, accompanied by documentation of such expenses.
(8) Certification that notice was filed with the Authority as required by Section 8074(a) above within 30 days of the date the Participating Financial Institution charged the Qualified Loan off on its books, and certification that such charge off was made in a manner consistent with the Participating Financial Institution's usual methods for taking action on loans which are not enrolled as Qualified Loans under the Program.
(9) Statement whether the loan is secured, and whether the Participating Financial Institution has commenced enforcement proceedings.
(10) If two or more claims are filed simultaneously by one Participating Financial Institution, a statement of the priority of payment of the claim compared to the other claims in the event the Loss Reserve Account is not sufficient to pay all claims.
(11) Statement whether the Qualified Loan qualifies under Section 8074(f).
(12) Certification that the Participating Financial Institution has given notice to the Authority of the initial enrollment of the loan and certification that either (A) the Participating Financial Institution has given notice to the Authority of any renewals or extensions of the loan, or (B) the loan was continuously renewed or extended within the Participating Financial Institution since the date of its initial enrollment.
(e) Except as provided in Section 8074(f) below, if a Qualified Loan suffers a loss and at the time of the Participating Financial Institution's claim there are insufficient funds in the Loss Reserve Account to cover the total amount of the claim, the Participating Financial Institution shall be able to withdraw all of the amount in the Loss Reserve Account at the time of the claim, to cover the loss to the fullest extent possible, but it shall thereafter not be eligible to obtain any further reimbursement relating to that claim.
(f) If a Qualified Loan (or any part of it) is among the first one million dollars of Qualified Loans made by a Participating Financial Institution and it suffers a loss, and at the time of the claim there is not enough money in the Loss Reserve Account to fully cover the loss, the Participating Financial Institution shall be able to withdraw all of the amount in the Loss Reserve Account at the time of the claim, to cover the loss to the fullest extent possible. If the Participating Financial Institution then continues making Qualified Loans under the Program and the Loss Reserve Account is replenished, the Participating Financial Institution shall be authorized to withdraw funds from the Loss Reserve Account at a subsequent time in order to fully cover the earlier claim, provided that the amount subsequently withdrawn to cover the earlier claim cannot exceed 75 percent of the amount in the Loss Reserve Account immediately prior to such subsequent withdrawal.
(g) If subsequent to the payment of a claim by the Authority, the Participating Financial Institution recovers from the Borrower, from liquidation of collateral or from any other source, amounts for which the Participating Financial Institution was reimbursed by the Authority, the Participating Financial Institution shall promptly pay to the Authority for deposit in the Loss Reserve Account, the amount received, net of reasonable and customary costs of collection, that in aggregate exceeds the amount needed to fully cover the Participating Financial Institution's loss on the Qualified Loan (including the portion of a Qualified Loan which is not enrolled in the Program). Recoveries which exceed reimbursements to the Loss Reserve Account may be retained by the Participating Financial Institution.



Note: Authority cited: Sections 44520 and 44559.5(f), Division 27, Health and Safety Code. Reference: Section 44559.5, Division 27, Health and Safety Code.


s 8075. Subrogation.
(a) The Authority will be subrogated to the rights of the Participating Financial Institution in collateral, personal guarantees and all other forms of security for the Qualified Loan that have not been realized upon by the Participating Financial Institution, when the Participating Financial Institution's loss has been fully covered by payment of a loss claim, or by a combination of payment of a loss claim and recovery from the Borrower, liquidation of collateral, or from other sources.
(b) At the time of subrogating its rights, the Participating Financial Institution shall provide the Authority with all original security agreements, any documents evidencing title to real property, certificates of title, guarantees, and any other documents representing security for the Qualified Loan, duly recorded and perfected, and accompanied by enforceable assignments and conveyances to the Authority, unless such security documents also secure indebtedness to the Participating Financial Institution which was not covered by the Qualified Loan. In such latter case, the Participating Financial Institution shall enter into an intercreditor agreement with the Authority, providing that the Participating Financial Institution shall be entitled to recover under such security documents, to the extent possible, the full amount of its loss on any indebtedness not covered by the Qualified Loan but secured by the same collateral as the Qualified Loan; the balance of any amounts recovered under such security documents shall be deposited in the Loss Reserve Account. The Participating Financial Institution shall provide regular reports, as requested by the Executive Director, concerning its activities in collecting moneys owed from a defaulted Borrower.
(c) The Executive Director shall be authorized to enter into agreements with any Participating Financial Institution to provide for such institution to act as the Authority's agent to secure recovery under any collateral or security documents to which the Authority has been subrogated.



Note: Authority cited: Sections 44520 and 44559.5(f), Division 27, Health and Safety Code. Reference: Section 44559.2, Division 27, Health and Safety Code.


s 8076. Termination and Withdrawal from Program.
(a) A Participating Financial Institution shall be authorized to withdraw from the Program after giving written notice to the Authority. Such notice shall specify either:
(1) that the Participating Financial Institution waives any further interest in the Loss Reserve Account (including for the reason that all Qualified Loans covered by the Loss Reserve Account have been repaid); or
(2) that the Participating Financial Institution will not enroll any further loans under the Program but that the Loss Reserve Account shall continue in existence to secure all Qualified Loans enrolled prior to such notice.
(b) After receipt of a notice under subsection (a)(1) or receipt of a certificate from a Participating Financial Institution which has withdrawn from the Program pursuant to subsection (a)(2), certifying that all Qualified Loans secured by the Loss Reserve Account have been repaid and that there are no pending claims for reimbursement under Section 8074, the remaining balance in the Loss Reserve Account shall be distributed to the Authority; provided that with respect to moneys deposited in the Loss Reserve Account after January 1, 1999 (and assuming all claims made after January 1, 1999 are first allocated to moneys on deposit prior to that date), such moneys shall be distributed to the Authority and to the Participating Financial Institution in the amount of the Authority Share and the Participating Financial Institution Share, respectively. For purposes of this Section 8076, "Authority Share" means the ratio of the contributions made by the Authority (or any Independent Contributor on behalf of the Authority) to the Loss Reserve Account in question from January 1, 1999 to the date of calculation, to the total amount of contributions made to such Loss Reserve Account during that period, and "Participating Financial Institution Share" means 100 minus the Authority Share.
(c) The Executive Director shall be authorized to terminate participation of a Participating Financial Institution in the Program, by notice in writing, upon the occurrence of any of the following:
(1) entry of a cease and desist order, regulatory sanction, or any other action against the Participating Financial Institution by a regulatory agency that may impair its ability to participate in the Program;
(2) failure of the Participating Financial Institution to abide by the Law or this Article; or
(3) failure of the Participating Financial Institution to enroll any Qualified Loans under the Program for a period of one year.
In the event of such termination, the Participating Financial Institution shall not be authorized to enroll any further Qualified Loans, but all previously enrolled Qualified Loans shall continue to be covered by the Loss Reserve Account until they are paid, claims are filed, or the Participating Financial Institution withdraws from the Program pursuant to Section 8076(a)(1).
(d) If for a consecutive 12-month period the amount in the Loss Reserve Account continuously exceeds the outstanding balance of all the Participating Financial Institution's Qualified Loans made since the beginning of the Program, the Executive Director shall be authorized to withdraw any such excess to bring the Loss Reserve Account down to an amount equal to 100 percent of the outstanding balance, in the following manner: (i) first, distributions shall be made to the Authority up to an amount allocable to the moneys on deposit in the Loss Reserve Account on January 1, 1999 (assuming all claims made after January 1, 1999 are first allocated to moneys on deposit prior to that date) and (ii) further distributions shall be made to the Authority and to the Participating Financial Institution based on the Authority Share and the Participating Financial Institution Share, respectively.



Note: Authority cited: Sections 44520 and 44559.5(f), Division 27, Health and Safety Code. Reference: Section 44559.2, Division 27, Health and Safety Code.


s 8077. Reports of Regulatory Agencies.
The Executive Director shall be authorized to seek information directly from any federal or state regulatory agency concerning any Participating Financial Institution participating in the Program.



Note: Authority cited: Sections 44520 and 44559.5(f), Division 27, Health and Safety Code. Reference: Section 44559.2, Division 27, Health and Safety Code.


s 8078. Participation in the Program by Certain Public or Private Entities.
(a) The Authority shall be authorized to permit any individual, company, corporation, institution, utility, government agency or other entity, including any consortium of these persons or entities, to become an Independent Contributor after such person or entity
(1) submits to the Authority its Standards; provided that the Authority shall not enforce compliance by the Independent Contributor with its Standards;
(2) represents to the Authority that it will not enter into an exclusive arrangement with a particular Participating Financial Institution, but that it is prepared to work with anyParticipating Financial Institution under the Program; (continued)