§ 44559.14. — 44559.14. (Amended by Stats. 2025, Ch. 710, Sec. 14.)

(a)
(1)
It is the intent of the Legislature in enacting the act adding this section to create and fund a program to assist residential property owners and small business owners in seismically retrofitting residences and small businesses with a priority on soft-story buildings and unreinforced brick and concrete buildings. It is not the intent of the Legislature to assist the physical expansion of small businesses and residences.
(2)
The Legislature hereby establishes the California Seismic Safety Capital Access Loan Program. The program shall cover losses on qualified loans by participating lenders to qualified residential property owners or qualified small
businesses for eligible projects, as specified under this section. The program shall
be administered by the
Capital Programs and Climate Financing Authority and follow the terms and conditions for the Capital Access Loan Program in this article with the additional program requirements specified under this section.
(b)
For purposes of this section, unless the context requires otherwise, the following words and terms shall have the following meanings:
(1)
“Seismic retrofit construction” means alteration performed on or after January 1, 2017, of a qualified building or its components to substantially mitigate seismic damage. “Seismic retrofit construction” includes, but is not limited to, all of the following:
(A)
Anchoring the structure to the foundation.
(B)
Bracing cripple walls.
(C)
Bracing hot water heaters.
(D)
Installing automatic gas shutoff valves.
(E)
Repairing or reinforcing the foundation to improve the integrity of the foundation against seismic damage.
(F)
Anchoring fuel storage.
(G)
Installing an earthquake-resistant bracing system for mobilehomes that are registered with the Department of Housing and Community Development.
(H)
Strengthening a building’s lateral load resisting system.
(2)
“Eligible costs”
means the costs paid or incurred on or after January 1, 2017, for an eligible project, including any engineering or architectural design work necessary to permit or complete the eligible project less the amount of any grant provided by a public entity for the eligible project. “Eligible costs” do not include costs paid or incurred for any of the following:
(A)
Maintenance, including abatement of deferred or inadequate maintenance, and correction of violations unrelated to the seismic retrofit construction.
(B)
Repair, including repair of earthquake damage.
(C)
Seismic retrofit construction required by local building codes as a result of addition, repair, building relocation, or change of use or occupancy.
(D)
Other work or improvement required by local building or planning codes as a result of the intended seismic retrofit construction.
(E)
Rent reductions or other associated compensation, compliance actions, or other related coordination involving the qualified residential property owner or qualified small business and any other party, including a tenant, insurer, or lender.
(F)
Replacement of existing building components, including equipment, except as needed to complete the seismic retrofit construction.
(G)
Bracing or securing nonpermanent building contents.
(H)
The offset of costs,
reimbursements, or other costs transferred from the qualified residential property owner or qualified small business to others.
(3)
“Eligible project” means seismic retrofit construction that is necessary to ensure that the qualified building is capable of substantially mitigating seismic damage, and the financing necessary to pay eligible costs of the project.
(4)
“Qualified building” means a residential or commercial building that is identified by the local building code official for the jurisdiction in which the building is located as a building in need of seismic retrofitting and is either a building of a type that is potentially vulnerable in the event of a catastrophic earthquake or a building constructed before 1981.
(5)
“Qualified loan” means a loan or portion of a loan as defined in subdivision (j) of Section 44559.1, where the proceeds of the loan or portion of the loan are limited to the eligible costs for an eligible project under this program, and where the loan or portion of the loan does not exceed two hundred fifty thousand dollars ($250,000).
(6)
“Qualified small business” means a business referred to in subdivisions (i) and (m) of Section 44559.1 that owns a qualified building regardless of owner occupancy, notwithstanding the restriction on passive real estate ownership in subparagraph (B) of paragraph (2) of subdivision (j) of Section 44559.1.
(7)
“Qualified residential property owner” means either an owner of a residential building that is a qualified building or a
qualified small business that owns one or more residential buildings, including a multiunit housing building, that is a qualified building, notwithstanding the restriction on passive real estate ownership in subparagraph (B) of paragraph (2) of subdivision (j) of Section 44559.1.
(c)
(1)
The California Seismic Safety Capital Access Loan Program Fund is established in the State Treasury and shall be administered by the authority pursuant to Sections 44548 and 44549 for this program. For purposes of this section, the references in Sections 44548 and 44549 to “small business” shall include “qualified residential property owner,” as defined in this section. Notwithstanding Section 13340 of the Government Code, all moneys in the fund are continuously appropriated to the authority for carrying out this section. The
authority may divide the fund into separate accounts. All moneys accruing to the authority pursuant to this section from any source shall be deposited into the fund.
(2)
All moneys in the fund derived from any source shall be held in trust for the life of this program, for program expenditures and costs of administering this section, as follows:
(A)
Program expenditures shall include both of the following:
(i)
Contributions paid by the authority in support of qualified loans.
(ii)
Costs for a qualified expert to validate that the proceeds of the loans are eligible costs, as defined under this section.
(iii)
Reasonable costs to educate the small business community, residential property owners, and participating lenders about the program, including travel within the state.
(B)
Administrative expenditures shall be limited to 5 percent of the initial appropriation plus 5 percent of all moneys recaptured, and shall include all of the following:
(i)
Personnel costs.
(ii)
Service and vending contracts, other than program expenditures described in subparagraph (A), that are necessary to carry out the program.
(iii)
Other reasonable direct and indirect administrative costs.
(3)
The authority may
direct the Treasurer to invest moneys in the fund that are not required for its current needs in the eligible securities specified in Section 16430 of the Government Code as the authority shall designate. The authority may direct the Treasurer to deposit moneys in interest-bearing accounts in state or national banks or other financial institutions having principal offices located in the state. The authority may alternatively require the transfer of moneys in the fund to the Surplus Money Investment Fund for investment pursuant to Article 4 (commencing with Section 16470) of Chapter 3 of Part 2 of Division 4 of Title 2 of the Government Code. All interest or other increment resulting from an investment or deposit shall be deposited into the fund, notwithstanding Section 16305.7 of the Government Code. Moneys in the fund shall not be subject to transfer to any other fund pursuant to any provision of
Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code, excepting the Surplus Money Investment Fund.
(d)
The authority shall adopt regulations pursuant to Section 44520 to implement the program, including, but not limited to, provisions to:
(1)
Establish a new loss reserve account for each participating lender enrolling loans in this program.
(2)
Obtain a certification from each participating lender and qualified small business or qualified residential property owner upon enrollment of a qualified loan that the proceeds of the loan will be used for the eligible costs of an eligible project.
(3)
Contribute an additional incentive
from the fund for each loan enrolled for a qualified small business or qualified residential property owner located in a severely affected community.
(4)
Restrict the enrollment of a qualified loan in any other Capital Access Loan Program for a qualified small business or qualified residential property owner offered by the authority as long as funds are available for this program.
(5)
Limit the term of loss coverage for each qualified loan to no more than 10 years.
(6)
Recapture from the loss reserve account the authority’s contribution for each enrolled loan upon the maturation of that loan or after 10 years from the date of enrollment, whichever happens first, to be deposited in the fund and applied to future program
and administrative expenditures.
(e)
The authority may adopt regulations relating to residential property owner or small business financing as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. For purposes of that Chapter 3.5, including Section 11349.6 of the Government Code, the adoption of the regulations shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare. The regulations shall be repealed 180 days after their effective date, unless the adopting authority or agency complies with that Chapter 3.5.

Legislative History

Amended by Stats. 2025, Ch. 710, Sec. 14. (AB 786) Effective January 1, 2026.