Article 1.2. Leveraging the
Recycling Market Development Zone Revolving Loan Fund
Section 17939.1. Purpose of Leveraging the Revolving Loan Fund.
The purpose of leveraging Board funds in the Recycling Market Development Revolving Loan Subaccount (Subaccount) is to increase the funding for loans to recycling-based businesses and to promote the long-term sustainability of the Recycling Market Development Revolving Loan Program. Subaccount funds will be used to stimulate more lending by private banks, public institutions and non-profit organizations than the Board could make on its own to recycling-based businesses.
Note:
Authority cited:
Section 40502 of the Public Resources
Code.
Reference:
Sections 42023.1, 42023.6 and 42024 of the Public Resources
Code.
Section 17939.2. Definition.
“Leverage” and “leveraging” means the expenditure, lending, investment
or other uses of funds from the Recycling Market Development Revolving
Loan Program Subaccount (Public Resources Code Section 42023.1) in a
manner that generates or facilitates the generation of financial capital
that is made available as loans to borrowers eligible for loans under
the Board's Recycling Market Development Revolving Loan Program as
described in Article 1.1 of this Chapter. Leveraging programs increase
the number and value of loans for specified purposes beyond that which
the Board, acting alone, could make. Typical examples of leveraging
include, without limitation, pooling funds by multiple entities under
specified arrangements to create a greater supply of loan capital for
eligible borrowers, loan guarantee programs where an entity guarantees
all or a portion of an eligible loan, and insurance where an entity
assures that a loan will be repaid in a timely manner.
Note:
Authority cited:
Section 40502 of the Public Resources
Code.
Reference:
Sections 40506.1, 42023.1, 42023.6 and 42024 of the Public Resources
Code.
Section 17939.3. Types of Leveraging Entities and Programs.
The types of leveraging programs in which the Board may participate, and
financing entities with which the Board may contract, include but are not
limited to:
(a) The Capital Access Program, that provides loan default insurance
as a credit enhancement, pursuant to Public Resources Code 42023.6.
(b) The State Small Business Loan Guarantee program, that provides a
state guarantee to entice bank and non-bank entities to lend to
California small businesses, pursuant to California Corporations Code
section 14000 et seq.
(c) Financial Development Corporations (FDC) that issue state loan
guarantees, pursuant to California Corporations Code section 14000 et
seq.
(d) Community Development Entities (CDE) for access to the New
Markets Tax Credit (NMTC) program, pursuant to Title 1, Subtitle C,
Section 121 of the Community Renewal Tax Relief Act of 2000.
(e) Community Development Financial Institutions (CDFI) for access to
the Equity Equivalent Investment (EEI) and Program-Related Investment
(PRI) programs, pursuant to Title 12, Chapter 47, Subchapter 1, Section
4701 et seq. of the United States Code.
Note:
Authority cited:
Section 40502 of the Public Resources
Code.
Reference:
Sections 42023.1, 42023.6 and 42024 of the Public Resources
Code.
Section 17939.4. Leveraging Activities.
The Board may initiate, coordinate or participate in activities, either directly or indirectly, in partnership with public, non-profit or private entities, or by itself, that leverage Recycling Market Development Revolving Loan Program Subaccount (Subaccount) funds. The leveraging of Subaccount funds may include, but is not limited to, the transfer and/or encumbrance of Subaccount funds for leveraging; the establishment of trust accounts for the receipt, retention and expenditure of funds designated for leveraging; the pooling of Subaccount funds with other individual or multiple entities under specified arrangements; the use of Subaccount funds in support of loan guarantee programs, where an entity guarantees all or a portion of an eligible loan, or as insurance where an entity assures that a loan will be repaid in a timely manner; the use of Subaccount funds for grants or loans to public, private or non-profit organizations to implement leveraging programs; and the acceptance of funds from investors and institutions.
Note:
Authority cited:
Sections 40502 and 42881 of the Public Resources Code.
Reference:
Sections 42023.1, 42023.6 and 42024 of the Public Resources Code.
Section 17939.5. Loan Sale.
(a) The Board may sell loans, either in bulk quantity or individually; in
whole or in part; on a recourse or non-recourse basis; on an advance
commitment, forward, or participation basis; and may retain or relinquish
the servicing rights;
(b) the Board shall not sell its loans if the loan sale results in
more than a twenty-five percent (25%) discount of the principal amount,
excluding any expenses or reserves required as a condition of the loan
sale; and
(c) all proceeds received from the sale of loans shall be deposited
into the Recycling Market Development Revolving Loan Program Subaccount.
Note:
Authority cited:
Section 40502 of the Public Resources
Code.
Reference:
Section 40506.1 of the Public Resources
Code.
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