§ 68206. Loan Application Process.

(a) An Application may be submitted to the Department at any time;

(b) Upon receipt of an Application, the Department will review the Application for completeness and eligibility. Upon receipt of an Application, the Department will determine whether the Application is complete, whether the Applicant is an Eligible Applicant, and whether the Property is an Eligible Property. The Applicant will be notified by certified letter of one of the following:

(1) The Application is incomplete, with identification of the information to be included for a complete Application; or

(2) The Applicant is ineligible or the Applicant's Property is an Ineligible Property, with identification of the steps to take to correct identified deficiencies; or

(3) The Applicant and Applicant's Property are eligible for a Loan, and the Application is complete.

(c) The Department may request additional information from the Applicant in order to determine whether the Applicant or the Property is eligible;

(d) Upon determination that an Application is complete and the Applicant and Applicant's Property are eligible, Department staff will prepare an evaluation of the Application. An Application that meets all the following criteria will be recommended for approval to the Loan Committee:

(1) The Applicant is found creditworthy, as determined by considering the following elements:

(A) Character - the complex mental and ethical traits marking and often individualizing a Person or group; includes history of the business, work experience of key managers, and credit reports;

(B) Capacity - the ability of the Applicant to operate the business successfully and generate the cash needed to repay obligations as they come due;

(C) Capital - Applicant's other assets on which to rely if the primary source of income is interrupted or reduced;

(D) Collateral - appropriate security interest in the Property pledged by the Applicant; and

(E) Conditions - economic and environmental influences on the Applicant's financial condition and performance. Includes the general economy, business climate, business environment, and the legal and regulatory situation.

(2) The collateral and the source of repayment are appropriate for the Loan amount;

(3) For a CLEAN Loan Program Loan, the Applicant has adequately demonstrated that the Response Action to be performed on the Property is necessary to address a release or threatened release of a Hazardous Material on the Property;

(4) For a CLEAN Loan Program Loan, the Applicant has adequately demonstrated the need of the requested Loan amount for use in the project; and

(5) For a CLEAN Loan Program Loan, the Applicant has adequately demonstrated that the total debt against the Property on which the Response Action will be taken, including the requested CLEAN Loan Program Loan, does not exceed 80 percent of the estimated value of the Property after all necessary Response Actions are complete.

(e) If prior to making a recommendation to the Loan Committee, the Department determines that the Application does not meet the criteria in subsection (d) above, the Department may disapprove the Application and notify the Applicant in writing of the Department's determination;

(f) An Applicant may request the Loan Committee's review of the Department's determination under subsection (e);

(g) If the Department determines that sufficient funding to meet the demand for CLEAN Loan Program Loans and ISCP Loans will not be available in a given fiscal year, the Department shall calculate a priority score to rank each Loan Application using scales that measure the following factors:

(1) Twenty-five (25) percent of the priority score is based on the potential for the proposed Project to provide additional protection of public health and safety and the environment;

(2) Twenty-five (25) percent of the priority score is based on the potential for proposed Project to enhance strategic community development including:

(A) Creation of new jobs;

(B) Generation of additional tax revenue;

(C) Likelihood that the proposed Project will stimulate additional redevelopment in adjacent areas as measured by improvement of local property values;

(D) Degree to which implementation of the proposed Project will result in the development of new parks;

(E) Degree to which implementation of the proposed Project will result in the development of new schools;

(F) Degree to which implementation of the proposed Project will result in the development of affordable inner city housing and regional Infrastructure or projected regional Infrastructure needs, or otherwise promote infill development;

(G) Economic viability of the proposed Project, including, but not limited to an analysis of the current value of the Property as compared to its projected value after all necessary Response Actions have been completed;

(H) Ability of the Loan Applicant to successfully perform the proposed Project;

(I) Ability of the Loan Applicant to repay the Loan;

(J) Consideration of the number and amounts of Loans approved for the Projects located in the same area;

(K) Likelihood that the proposed Project would be completed if the CLEAN Loan Program Loan is not made;

(L) Ability to obtain conventional financing absent a Loan under this program.

(3) Twenty-five (25) percent of the priority score is based on community support as demonstrated by letters of support from city, county, or other Local Agencies, residents or citizen groups, state or local elected officials, the general public, or other community groups;

(4) Twenty-five (25) percent of the priority score is based on financial support as demonstrated by approved loans, letters of commitments from other financial sources, and commitments for in-kind support from Local Agencies and citizen groups, or funding as set fort in paragraph (2) of subdivision (c) of section 25395.23 of the Health and Safety Code.

(h) The Department staff may recommend that the amount of Loan funding requested in an Application be approved in whole or in part.

HISTORY

1. New section filed 1-18-2001 as an emergency; operative 1-18-2001 (Register 2001, No. 3). Pursuant to Health and Safety Code section 25395.29, a Certificate of Compliance must be transmitted to OAL by 7-17-2001 or emergency language will be repealed by operation of law on the following day.

2. New section refiled 7-6-2001 as an emergency; operative 7-18-2001 (Register 2001, No. 27). Pursuant to Health and Safety Code section 25395.29, a Certificate of Compliance must be transmitted to OAL by 1-14-2002 or emergency language will be repealed by operation of law on the following day.

3. Certificate of Compliance as to 7-6-2001 order transmitted to OAL 1-14-2002; Certificate of Compliance withdrawn from review 2-27-2002. Repealed by operation of Government Code section 11346.1(g) (Register 2002, No. 9).

4. New section filed 3-1-2002 as an emergency; operative 3-1-2002 (Register 2002, No. 9). Pursuant to Health and Safety Code section 25395.29, a Certificate of Compliance must be transmitted to OAL by 8-28-2002 or emergency language will be repealed by operation of law on the following day.

5. Certificate of Compliance as to 3-31-2002 order, including amendment of section and Note, transmitted to OAL 6-21-2002 and filed 8-5-2002 (Register 2002, No. 32).

6. Change without regulatory effect amending subsection (g)(1) filed 7-20-2009 pursuant to section 100, title 1, California Code of Regulations (Register 2009, No. 30).

Note

Note: Authority cited: Sections 25150, 25351.5, 25395.29 and 58012, Health and Safety Code. Reference: Sections 25395.21, 25395.22, 25395.23, 25395.27 and 25395.28, Health and Safety Code.