BILL NUMBER: AB 8 CHAPTERED 03/29/01 CHAPTER 3 FILED WITH SECRETARY OF STATE MARCH 29, 2001 APPROVED BY GOVERNOR MARCH 29, 2001 PASSED THE SENATE MARCH 22, 2001 PASSED THE ASSEMBLY MARCH 22, 2001 AMENDED IN SENATE MARCH 21, 2001 INTRODUCED BY Assembly Member Cedillo DECEMBER 4, 2000 An act to amend Section 50898.2 of the Health and Safety Code, relating to housing and community development, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 8, Cedillo. Downtown Rebound Program. Existing law requires the Department of Housing and Community Development to make grants and loans for specified downtown rebound projects and related planning from funds appropriated in a specified item of the Budget Act of 2000. The amount of assistance for loans for adaptive reuse of commercial or industrial structures into rental housing units is limited to $40,000 or $20,000, respectively, for units that are, or are not, required to be reserved for specified low-income households. This bill would increase those limits to $55,000 and $35,000, respectively, thereby making an appropriation by increasing the limits on an authorized expenditure. The bill would also require the projects for which that assistance is provided to be located within an elementary school attendance boundary where 50% or more of the students are eligible for free meals under the federal school lunch program, as determined by the local school district at the time of application to the downtown rebound program. The bill would declare that it is to take effect immediately as an urgency statute. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 50898.2 of the Health and Safety Code is amended to read: 50898.2. (a) Funds awarded pursuant to Item 2240-107-0001 of Section 2.00 of the Budget Act of 2000 for the purposes of the Downtown Rebound Program established pursuant to this chapter shall not be subject to the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Title 2 of the Government Code. (b) The department may use up to 5 percent of the amounts appropriated for this program for administration. (c) With respect to the appropriation in Item 2240-107-0001 of Section 2.00 of the Budget Act of 2000 for the Downtown Rebound Program established pursuant to this chapter, the following provisions shall apply: (1) Seventy-six percent of that appropriation shall be used by the department for the purpose of making loans to project sponsors for the adaptive reuse of vacant or underused commercial or industrial structures into residential rental housing units for initial rental to households having an income not exceeding 150 percent of the area median income. Each project shall be located within an elementary school attendance boundary where 50 percent or more of the students are eligible for free meals under the federal school lunch program, as determined by the local school district at the time of application to the Downtown Rebound Program. Each project shall also be subject to the following restrictions: (A) Loans for units not subject to subparagraph (D) shall be at 5 percent simple interest. Loans for units subject to subparagraph (D) shall be at 3 percent simple interest. All principal and interest shall be due and payable in 20 years. (B) Assistance for units not subject to subparagraph (D) shall not exceed thirty-five thousand dollars ($35,000) per unit. Assistance for units subject to subparagraph (D) shall not exceed fifty-five thousand dollars ($55,000) per unit. (C) The amount of the loan, in combination with all debt recorded in a senior position to the loan, shall not exceed 90 percent of the appraised after-rehabilitation value of the security for the loan. (D) Twenty percent of the units in the project shall be reserved for households having an income equal to 50 percent or less of the area median income, or 40 percent of the units shall be reserved for households having an income equal to 60 percent or less of the area median income. The department shall ensure the continued affordability of all units designated by the sponsor to fulfill these requirements for a period of 20 years. However, notwithstanding subparagraph (A), if assistance is provided for these units through any program funded through Chapter 6.7 (commencing with Section 50675) of Part 2, the units shall be subject to the use restrictions, limitations, and provisions contained in that chapter. These units shall be reasonably distributed within each building contained in the project, with no less than 10 percent of the units in each building fulfilling the requirements of this subdivision. (E) The sponsor shall agree to the payment of prevailing wage rates with respect to construction assisted through the program. In implementing this subparagraph, it is the intent of the Legislature that this requirement apply to construction work that is dependent on the commitment of program funds in order for construction to proceed. Notwithstanding any other provision of law, the department' s enforcement responsibilities shall be limited to the imposition of this requirement through the lending documents. The department shall require, as a condition of loan closing, a signed certificate that prevailing wages have been, or will be, paid in conformance with the requirements of Chapter 1 (commencing with Section 1720) of Part 7 of the Labor Code and that labor records shall be made available to any enforcement agency upon request. (2) Two million four hundred thousand dollars ($2,400,000) of that appropriation shall be used by the department for planning grants as specified in subdivision (b) of Section 50898.1. (3) The balance of that appropriation shall be available for uses authorized by subdivision (a) of Section 50898.1. SEC. 2. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: To ensure that assistance provided for the conversion of commercial or industrial structures to residential rental housing units is distributed in an appropriate manner as intended by Chapters 83 and 957 of the Statutes of 2000, it is necessary that this act take effect immediately.