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AB 407

California Pollution Control Financing Authority.

2025-2026 Regular Session Introduced by Corey Jackson

AB 407 updates CPCFA authority by relaxing review duties for rate‑reduction bonds, expanding and funding Capital Access/ADA/Seismic programs with continuously appropriated funds.

In committee: Held under submission.
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Bill Summary · AB 407

AB 407 (Jackson) — California Pollution Control Financing Authority

Status: In committee — Held under submission (Assembly Appropriations, 05/23/2025)
Introduced: February 4, 2025 | Classification: Bill; Appropriation
Digest Key: 2/3 vote required; Appropriation: YES; Fiscal Committee: YES

Purpose / Intent

AB 407 updates statutes governing the California Pollution Control Financing Authority (CPCFA) and several capital access loan programs it administers. The bill (1) removes certain CPCFA review and duty requirements tied to Marks‑Roos/“rate reduction bond” financings for publicly owned utilities; (2) consolidates and clarifies funding mechanics for the CPCFA’s Capital Access Loan Program; and (3) expands allowable expenditures from two continuously appropriated program funds (ADA small business and Seismic Safety capital access funds) to explicitly include specified forms of “financial assistance.” Because those changes create or expand continuously appropriated funds, the bill effects state appropriations.

Key Provisions

  • Amends Government Code § 6588.7 (Marks‑Roos/utility project financing):
    • Retains authority for certain JPAs to issue rate reduction bonds and to impose utility project charges for publicly owned utilities, and preserves the statutory requirements for local legislative findings before applying for such financing (e.g., project qualifies as a utility project; projected rate impacts or substantial benefits).
    • Removes specified statutory requirements and duties that previously required CPCFA to review each issue of bonds and make particular determinations related to those financings (text in digest describes deletion of CPCFA review duties).
  • California Capital Access Fund (Capital Access Loan Program for Small Businesses):
    • Requires all moneys accruing to CPCFA under the program be deposited into the California Capital Access Fund.
    • Authorizes the Fund to receive and accept additional private, state, or federal funding sources as specified.
    • Creates a continuously appropriated fund (constitutes an appropriation).
  • California ADA Small Business Capital Access Loan Program Fund and California Seismic Safety Capital Access Loan Program Fund:
    • Expands the list of permissible program expenditures to expressly include certain types of “financial assistance” (as defined in the bill).
    • Because these funds are continuously appropriated, expanding allowable expenditures constitutes an appropriation.

Who is Affected

  • CPCFA (governance remains the three-member body: Director of Finance, State Treasurer, State Controller): reduction in specific oversight duties in Marks‑Roos related reviews.
  • Local agencies that own/operate publicly owned utilities: procedural and oversight changes for financing utility projects with rate reduction bonds; statutory findings and rate‑testing requirements remain.
  • Small businesses and residential property owners participating in CPCFA-administered Capital Access, ADA, and Seismic Safety loan programs: potential for expanded access to “financial assistance” and greater fund flexibility.
  • State fiscal profile: creation/expansion of continuously appropriated funds affects State appropriations and budgetary treatment.

Potential Impacts and Considerations

  • Oversight vs. efficiency: removing CPCFA’s statutorily required review of each Marks‑Roos/rate reduction bond issue may speed transactions but reduces a layer of state review.
  • Increased fund flexibility could enable program expansion or the leveraging of additional private/state/federal sources, potentially supporting more small businesses or seismic/ADA projects.
  • Fiscal: because the bill creates or expands continuously appropriated funds, it has appropriation implications and requires a 2/3 legislative vote.

Legislative Timeline / Actions (selected)

  • 02/04/2025: Read first time; to print.
  • 02/18/2025: Referred to Assembly Banking & Finance and Local Government.
  • 04/18/2025: Hearing — Assembly Banking & Finance (amended).
  • 04/29/2025: From Assembly Local Government committee (amended and re‑referred).
  • 05/01/2025–05/14/2025: Further committee actions and referral to Appropriations (suspense file).
  • 05/23/2025: In committee — Held under submission.

If you would like, I can:
- Extract and summarize the specific statutory text deletions/additions (full §6588.7 before/after) if you provide the complete bill text; or
- Draft a short memo highlighting fiscal effects for the Legislative Analyst’s Office or Appropriations Committee.

Compiled from official sources — confirm details with the bill’s official record.

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