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October 6, 2011
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William Leiter (916) 651-4011 .(JavaScript must be enabled to view this email address)
SIMITIAN BILL TO EXPAND SMALL BUSINESS
LOAN PROGRAM BECOMES LAW
SACRAMENTO – Governor Jerry Brown has signed State Senator Joe Simitian’s (D-Palo Alto) bill to expand the California Capital Access Program (CalCAP) for small businesses. Through Senate Bill 225, small trucking companies will be able to access financing mechanisms for fleet upgrades necessary to improve air quality.
“Expanding CalCAP is good for California businesses, and good for the environment,” Simitian said. “By making better use of the State’s limited financial resources, SB 225 helps small trucking companies comply with existing air quality regulations, which can be especially difficult during tough economic times.”
California Air Resources Board regulations require retrofitting and upgrading of truck engines starting in 2012, with all trucks required to have 2010 model year engines or equivalent by 2023. To help meet this goal, the Air Resources Board is partnering with the State Treasurer to provide funding and loss protection to financial institutions that lend to small trucking companies. The program is targeted at companies that may not otherwise be able to get a loan.
In the trucking industry, terminal rental adjustment clause (TRAC) leases are a preferred form of financing for fleet upgrades. Designed specifically for trucks, these leases are often less expensive than typical loans and yet still allow for eventual purchase of the equipment at the end of the term. However, under existing law the Treasurer is unable to support such leases through CalCAP. Senate Bill 225 therefore expands the program to include support for TRAC leases.
“The net result of SB 225 is to make more efficient use of existing program funds,” Simitian noted. “This simple change in law helps small businesses while also improving California’s air quality, all at no additional cost.”
Simitian collaborated with small businesses leaders to craft the legislation. “Senate Bill 225 provides a very helpful financing option for trucking companies striving to comply with diesel regulations,” said Michael Shaw, Vice President of External Affairs for the California Trucking Association. “As the California economy struggles to regain its footing, this measure will help California companies comply with the costly On-Road Diesel Rule.”
Senate Bill 225 enjoyed unanimous bipartisan support in the Legislature. In addition to the aforementioned organizations, State Treasurer Bill Lockyer and a number of private companies also supported the bill.
Because SB 225 contains an urgency clause, the law goes into effect immediately. For more information on the bill, please visit http://www.senatorsimitian.com/legislation.