ARTICLE 7. California Investment and Innovation Program [44558. - 44558.5.]

Cal. Health and Safety Code - HSC 7.

in effect

Cal. Health and Safety Code - HSC § 44558. Section 44558.

For purposes of this article: (a) “Administration expenses” means the reasonable and necessary expenses incurred by the authority in the administration of this article, including, without limitation, the fees and costs of attorneys, consultants, and other individuals. (b) “Applicant” means an eligible applicant that applies to the authority for a grant pursuant to this article. (c) “Authority” means the Capital Programs and Climate Financing Authority. (d) “Community development financial institution” means any community development financial institution certified by the federal Community Development Financial Institutions Fund under Part 1805 (commencing with Section 1805.100) of Chapter XVIII of Title 12 of the Code of Federal Regulations. (e) “Disadvantaged community” means a census tract in which the median household income is less than 80 percent of the statewide or county annual median household income level, whichever is less. (f) “Eligible applicant” means a community development financial institution for which all of the following applies: (1) The applicant shall have a current certification pursuant to Section 1805 of Title 12 of the Code of Federal Regulations. (2) The applicant shall have a minimum net worth of twenty-five thousand dollars ($25,000) as indicated on its financial statements prepared in accordance with generally accepted accounting principles. (3) The applicant shall have made a minimum of five loans in the 12 months prior to submitting its application. (4) Either of the following applies: (A) The community development financial institution has a principal office in California, the officers of which are domiciled in California. (B) The community development financial institution has a record of lending in this state, based on either of the following: (i) At least 25 percent of the community development financial institution’s loan portfolio, at the time of the application, provides financial assistance to persons or projects located in this state. (ii) The community development financial institution has provided financing assistance in this state totaling at least ten million dollars ($10,000,000) in the three years prior to its application. (g) “Executive director” means the Executive Director of the Capital Programs and Climate Financing Authority. (h) “Fund” means the California Investment and Innovation Fund created in subdivision (b) of Section 44558.1. (i) “Low-income communities” has the same meaning as defined in Section 39713 of the Health and Safety Code. (j) “Lower income household” has the same meaning as defined in Section 50079.5 of the Health and Safety Code. (k) “Program” means the California Investment and Innovation Program established in subdivision (a) of Section 44558.1. ( l ) “Small and emerging community development financial institution” means a community development financial institution that has less than ten million dollars ($10,000,000) in assets.

Cal. Health and Safety Code - HSC § 44558.1. Section 44558.1.

(a) (1) The authority shall establish the California Investment and Innovation Program for the purpose of providing grants to enhance the capacity of community development financial institutions to provide technical assistance and capital access to economically disadvantaged communities in this state. (2) The authority shall adopt guidelines for the implementation of this program consistent with this article. (b) The California Investment and Innovation Fund is created in the State Treasury. The authority shall allocate moneys in the fund to eligible recipients in accordance with this article. Notwithstanding Section 13340 of the Government Code, all moneys in the fund are continuously appropriated to the authority to carry out the purposes of this article. All moneys accruing to the authority pursuant to this article from any source shall be deposited into the fund. (c) The California Investment and Innovation Fund may receive funds from any source, including, but not limited to, the federal government, philanthropic entities, financial institutions, and state funds appropriated for this purpose. (d) The authority may access moneys in the fund for administrative costs as necessary to implement the program, subject to conditions, if any, stipulated in the appropriation of the funds. (e) Notwithstanding any other law, 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, except the Surplus Money Investment Fund.

Cal. Health and Safety Code - HSC § 44558.2. Section 44558.2.

(a) When funding is available, the authority shall make the funding available to eligible applicants selected by the authority to participate in the program. Unless otherwise prohibited by law, the authority shall use the available funding to do all of the following: (1) Develop an application process for awarding grants to eligible applicants pursuant to the program and require each eligible applicant to submit an application in the form and manner prescribed by the authority. (2) Set aside at least 20 percent of any amount made available in a program funding round for eligible applicants that are small and emerging community development financial institutions. (3) Ensure that eligible recipients receiving grants pursuant to the program serve geographically diverse areas, both urban and rural, across this state. (b) (1) When funding is available, the authority shall make grants available in one or more rounds of funding availability, not to exceed fifteen million dollars ($15,000,000) in total grants in any calendar year. (2) Awards shall be announced by February 1 of each year. The first round of funding shall be awarded by February 1, 2024. (3) Funds shall be available for use by the grantee for a period of two years, as specified in the grant agreement entered into pursuant to Section 44558.3. Grant funds shall be used as prescribed by the article and the grant agreement for a period of two years. Upon the expiration of that two-year period and that grant agreement, there shall be no limitation on the use of the grant funds. (4) Any income generated from the grant award during the term of grant agreement entered into pursuant to Section 44558.3 shall be reinvested by the grantee into activities allowable under the grant agreement. (c) As part of the application process described in subdivision (a), the authority shall determine the amount that any eligible applicant who submits a timely and complete application may receive per calendar year, subject to the following conditions: (1) All eligible applicants that submit a timely and complete application shall receive a grant. In each round of funding the authority shall, in announcing the availability of funding, establish a minimum and maximum grant amount. (2) For the purpose of determining the amount of individual grants, the authority shall develop criteria to adjust the size of awards based on the total amount of loans closed by the applicant in the most recently completed fiscal year. (3) After receiving a grant in one year, an eligible applicant may apply in a future funding round if the eligible applicant has made reasonable progress in deploying the previously awarded grant funding.

Cal. Health and Safety Code - HSC § 44558.3. Section 44558.3.

(a) Prior to receiving any grant funds under this program, an applicant selected by the authority to participate in the program shall enter into a grant agreement with the authority that requires the applicant to do all of the following: (1) Achieve specific goals related to capacity building described in subdivision (b). (2) Provide information requested by the authority to support administration of the program. (3) Comply with terms and conditions imposed by the authority. (b) Unless otherwise prohibited by law, an eligible applicant that receives grant funds under the program may use those funds for either or both of the following purposes: (1) (A) To increase total net assets for the purpose of increasing the eligible applicant’s capacity to attract additional financing that the applicant uses to fund loans, loss reserves, or other means of finance for any of the following: (i) Commercial facilities that promote revitalization, community stability, or job creation or retention. (ii) Businesses that provide jobs for low-income persons, are owned by low-income persons, or increase the availability of products and services to low-income persons. (iii) Facilities providing health care, childcare, educational, cultural, or social services. (iv) The provision of checking, savings accounts, check cashing, money orders, certified checks, automated teller machines, deposit taking, safe deposit box services, and other similar services. (v) Development, preservation, or renovation of affordable housing. (vi) Credit building consumer loans with charges that do not exceed the amounts allowed by Sections 22304.5 and Section 22370 of the Financial Code. (B) For purposes of this section, “total net assets” means the amount of total assets minus total liabilities, as disclosed in an audited financial statement prepared according to generally accepted accounting principles. (2) To increase working capital for the purpose of funding services and operations that contribute to the overall community development mission of the eligible applicant, including technical assistance, technology, training, and other activities that benefit low-income neighborhoods, undercapitalized business owners, and other socially and economically disadvantaged individuals. (c) If a grantee is licensed pursuant to any division of the Financial Code and the grantee loses its license, the grant shall be forfeited and returned, in total, to the authority.

Cal. Health and Safety Code - HSC § 44558.4. Section 44558.4.

(a) Notwithstanding any other law, including subdivision (a) of Section 44520, the authority may adopt, amend, or repeal rules and regulations for the administration of the program pursuant to this article without complying with the procedural requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, except as described in subdivision (b). (b) The authority shall provide a notice of proposed action as described in Section 11346.5 of the Government Code. The notice of proposed action shall be provided to the public at least 21 days before the close of the public comment period, and the authority shall schedule at least one public hearing as described in Section 11346.8 of the Government Code before the close of the public comment period. The committee shall maintain a rulemaking file as described in Section 11347.3 of the Government Code. The final version of the regulations shall be accompanied by a final statement of reasons as described in subdivision (a) of Section 11346.9 of the Government Code. (c) These rules and regulations shall be effective immediately upon adoption by the authority.

Cal. Health and Safety Code - HSC § 44558.5. Section 44558.5.

(a) The authority shall adopt guidelines for annual reporting by grantees that do all of the following: (1) Provide a description of the grantee’s overall activities during the report period, including how the grant specifically contributed to these activities. (2) Require a grantee to provide an annual financial statement and meet record retention and audit requirements for the duration of the grant to ensure compliance with the limitations and requirements of this article. (3) Align the time period covered by the annual report required by this subdivision with the reporting period covered by the federal CDFI Program administered by the United States Department of the Treasury. (4) For the purpose of tracking the impact of individual grant awards, establish that the performance period shall start no earlier than the date the grant award agreement entered into pursuant to Section 44558.3 is signed and the funding is under the control of the grantee. (5) Unless otherwise prohibited by law, as a condition of receiving the grant, all grantees shall request businesses directly served by the grantee with grant funds to self-identify their gender, race, and ethnicity. Grantees shall annually report to the authority the information provided to them by the businesses. (b) By March 1, 2024, and annually thereafter, the authority shall post a report on the authority’s internet website that describes the results of the program, including, but not limited to, the total number of grants awarded, the amount of previously awarded grants that have been reported as spent by the grantees, an aggregation of any data provided by grantees, and a descriptive summary of the information provided by grantees pursuant to subdivision (a) in the most recent reporting period. The authority shall also include in the report any recommendations for improving the effectiveness, transparency, and accountability of public funds deployed to community development financial entities to serve the unmet needs of, and build inclusive economic prosperity in, California’s lower income neighborhoods and undercapitalized small businesses.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026