BILL NUMBER: AB 1008 CHAPTERED 09/20/02 CHAPTER 723 FILED WITH SECRETARY OF STATE SEPTEMBER 20, 2002 APPROVED BY GOVERNOR SEPTEMBER 20, 2002 PASSED THE ASSEMBLY AUGUST 30, 2002 PASSED THE SENATE AUGUST 28, 2002 AMENDED IN SENATE AUGUST 26, 2002 AMENDED IN SENATE AUGUST 22, 2002 AMENDED IN SENATE AUGUST 5, 2002 AMENDED IN SENATE JUNE 12, 2002 AMENDED IN SENATE FEBRUARY 5, 2002 AMENDED IN SENATE JULY 9, 2001 AMENDED IN ASSEMBLY JUNE 5, 2001 AMENDED IN ASSEMBLY MAY 31, 2001 AMENDED IN ASSEMBLY APRIL 16, 2001 AMENDED IN ASSEMBLY MARCH 27, 2001 INTRODUCED BY Assembly Member Lowenthal FEBRUARY 23, 2001 An act to amend Sections 17998.1 and 17998.2 of the Health and Safety Code, and to amend Sections 3351 and 3371 of the Revenue and Taxation Code, relating to property. LEGISLATIVE COUNSEL'S DIGEST AB 1008, Lowenthal. Housing assistance: property tax notices. (1) Existing law establishes the Code Enforcement Incentive Program pursuant to which the Department of Housing and Community Development, upon appropriation by the Legislature, is required to make funds available as matching grants to cities, counties, and cities and counties through December 31, 2003, to increase staffing dedicated to local building code enforcement efforts. This bill would also authorize these grant funds to be used for capital expenditures and require grants to be made to grantees that operate local building code enforcement programs for more than 3 years. (2) Existing law also requires that grant recipients submit a report, on or before June 30, 2004, to their local legislative bodies and to the department regarding the results of the expanded code enforcement efforts, and requires the department to summarize the results and transmit the reports to the Legislature by December 31, 2004. The bill would instead require grant recipients to submit the report to their local legislative bodies within 6 months after completion of each program cycle funded by the Legislature and require the department to transmit the reports within 6 months after the grant recipient's submission date. (3) Existing law also establishes, until January 1, 2005, the Community Code Enforcement Pilot Program pursuant to which the Department of Housing and Community Development awards grants to communities that develop a code enforcement pilot program meeting specified criteria that would operate until December 31, 2003. Pilot program administrators are required to evaluate the pilot programs and report that information to the department by June 30, 2004, and the department is required to report to the Legislature by December 31, 2004. This bill would delete the repeal date for the program. It would require grants to be made to programs that operate for more than 3 years. The bill would permit grant funds to be used for capital expenditures. It would also require that each pilot project submit its evaluation within 6 months after completion of each program cycle approved by the department and funded by the Legislature. (4) Existing law requires the tax collector to publish annually a notice of impending default for failure to pay taxes on real property and to publish annually the affidavit that real property on which taxes, assessments, penalties, and costs had not been fully paid are in default. This bill would permit the tax collector to include in those notices only properties that have been tax delinquent for 3 or more years in specified cases. The bill would, pursuant to legislative findings and declarations, permit the University of California to do a study of tax-delinquent properties and would require the Controller to provide the university with specified information relating to these properties upon receiving that information from the tax collector. By imposing new requirements upon tax collectors, this bill would impose a state-mandated local program. The bill would revise and limit the requirement to notify assessees of tax delinquent properties, and would express the intent of the Legislature in making this revision to offset costs incurred by the tax collector with regard to providing information, as required by this bill, for the study of the tax-delinquent properties. (5) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 17998.1 of the Health and Safety Code is amended to read: 17998.1. The Department of Housing and Community Development, upon appropriation by the Legislature for this purpose, shall make funds available as matching grants to cities, counties, and cities and counties to increase staffing or capital expenditures dedicated to local building code enforcement efforts. The funds shall be subject to all of the following provisions: (a) Grants shall be made to grantees that operate local building code enforcement programs for more than three years. (b) The city, county, or city and county shall provide a cash or in-kind local match of at least 25 percent in the first year, at least 50 percent in the second year, and at least 75 percent in the third year. (c) The maximum grant to a single recipient shall not exceed one million dollars ($1,000,000). The department may establish minimum grant levels and lower maximum grant levels, depending on the amount and uses of funding sources. (d) Funds may be used to supplement, but shall not supplant, existing local funding for code enforcement related to housing code maintenance. The applicants shall demonstrate an intent to ensure cooperative and effective working relationships between code enforcement officials and local prosecutorial agencies, the local health department, and local government housing rehabilitation financing agencies. (e) Within six months after completion of each program cycle approved by the department and funded by the Legislature, grant recipients shall submit a report to their local legislative bodies and to the department regarding the results of the expanded housing maintenance code enforcement efforts and recommendations for changes in state or local laws and regulations related to code enforcement. The department shall summarize the results and transmit the reports to the Legislature within six months after the grant recipient's submission date. The department may require submission of interim progress reports. (f) The department may use up to 5 percent of the funds appropriated by the Legislature for administering the programs authorized by this chapter. (g) The department shall award the grants on a competitive basis with criteria to be established and specified in a "Notice of Funding Availability." The criteria shall be weighted for local government applicants with neighborhoods populated by high percentages of lower income households, with significant numbers of deteriorating housing stock containing reported or suspected housing code violations and often owned by absentee owners. The criteria shall also be weighted for applications that propose to identify and prosecute owners with habitual, repeated, multiple code violations that have remained unabated beyond the period required for abatement. In addition to those criteria, the department shall attempt to award grants to cities, counties, and cities and counties in order to obtain a wide range of population sizes and compositions and geographical distribution. Eligibility criteria, applications, awards, and other program requirements implementing this chapter shall not be subject to the requirements of Chapter 2.5 (commencing with Section 11340) of Part 1 of Title 2 of the Government Code. SEC. 2. Section 17998.2 of the Health and Safety Code is amended to read: 17998.2. (a) It is the intent of the Legislature in the enactment of this section to do all of the following: (1) Initiate a coordinated active community approach to code enforcement. (2) Create a pilot program in which the department awards grants to communities that develop a code enforcement program pursuant to the criteria established by this section. (3) Substantially reduce the incidence of substandard housing through the use of creative and coordinated techniques of code enforcement involving an interdepartmental approach at the local government level. (b) The grant program established pursuant to this section shall be known as the Community Code Enforcement Pilot Program. The Department of Housing and Community Development shall administer the Community Code Enforcement Pilot Program. (1) The department need not adopt regulations for the program. The department shall publish and distribute a Notice of Funding Availability that contains application forms and instructions, eligibility criteria, criteria for the rating and ranking of applications, outcome evaluation criteria, interim or final reporting requirements, and other information that the department considers necessary or useful for implementation of the program. (2) The department shall review, rate, and rank applications based on its evaluation of the information provided pursuant to subdivision (e), and their projected program performance as measured by all of the following criteria, considering the size of the applicant community: (A) The minimum number of housing units affordable to lower income households that will be rehabilitated or otherwise brought into compliance with applicable building and housing codes. (B) The estimated amount of grants and low interest rehabilitation loan funds, from sources other than this program, that will be made available to the owners of housing units affordable to lower income households that are determined to need rehabilitation or repair pursuant to the program. (C) The incidence of poverty and deteriorating housing or housing code violations in each target area. (3) In addition to the other criteria in this subdivision, the department shall attempt to award community code enforcement pilot program grants to cities, counties, and cities and counties with a wide range of population sizes and compositions and geographical distribution. (c) The department shall award community code enforcement pilot program grants for programs that shall operate for more than three years. The grants shall not exceed four hundred fifty thousand dollars ($450,000), which shall pay for costs incurred over the life of the program. The department may establish minimum grant levels and lower maximum grant levels, depending on the amount and uses of funding sources. (d) Each city, county, or city and county receiving a grant shall develop a code enforcement team consisting of a least one full-time code enforcement officer and a part-time city planner, health officer, or comparable specialist. Each grantee shall provide, and fund at its own expense, at least one city planner, health officer, or comparable specialist for the duration of the pilot program, for a minimum of 20 hours per week. The grant funds shall be used for the code enforcement officer and related program costs, which may include full-time or part-time personnel, in addition to the grantee' s contributions, or for capital expenditures. (e) Grant proposals shall include all of the following: (1) Demonstration of serious, current housing code enforcement deficiencies within each target area, whether those code deficiencies are in violation of locally enacted ordinances or state codes. (2) A plan to have high visibility of code enforcement staff and to create close and frequent communication and interaction with residents and property owners of the target area, including in the evenings and on weekends. (3) A plan to convene community meetings to inform residents of the pilot program. (4) A plan to conduct ongoing frequent informal and formal community meetings with the code enforcement team and residents of the community involved in the pilot program. (5) A plan demonstrating an intent to ensure cooperative and effective working relationships between code enforcement officials, local health department officials, local prosecutorial agencies, and officials operating local programs providing public funds to finance affordable rental housing rehabilitation and repairs. (6) A plan for timely and effective administrative and judicial enforcement of code violations. (f) The administrator of each grantee's pilot program shall evaluate the pilot program and report the findings and other criteria requested by the department indicating the effectiveness of the pilot program to the department within six months after completion of each program cycle approved by the department and funded by the Legislature. The department may require submission of interim progress reports. The administrator shall evaluate the pilot program based on criteria including, but not limited to, the following: (1) Results of a participant survey, including owners, residents, and active community leaders. (2) Comparison of each targeted area with similar neighborhoods with respect to repeat calls for service and other criteria testing the effectiveness of the pilot program. (3) The extent of any perceived or actual property value change between the commencement and the completion of the pilot program. (4) The number of cases opened and the number of cases closed, identifying the nature of code violations, the necessity of formal proceedings, the cost and nature of abatement violations, or other factors influencing the effectiveness of the pilot program. (g) The department shall review and report to the Legislature within six months after the grant recipient's submission date on the findings of the pilot program administrators. SEC. 3. Section 3351 of the Revenue and Taxation Code is amended to read: 3351. (a) Annually, on or before June 8, the tax collector shall publish a notice of impending default for failure to pay taxes on real property, except tax-defaulted property and possessory interests, the taxes, assessments, penalties, and costs on which will have not been fully paid by the close of business on the last business day of the fiscal year. (b) If the tax collector sends reminder notices prior to the close of the fiscal year and annually sends a redemption notice of prior year due taxes, the notice required by subdivision (a) shall only include properties that have been tax-delinquent for three or more years and for which the latest reminder notice or redemption notice was returned to the tax collector as undeliverable. SEC. 4. Section 3371 of the Revenue and Taxation Code is amended to read: 3371. (a) Annually, on or before September 8, the tax collector shall publish the affidavit that the real property on which the taxes, assessments, penalties, and costs had not been fully paid are in default, together with a list of all that real property. However, in any county that mails delinquent notices to the assessees of record before June 30, the tax collector shall publish the affidavit and list of all that real property on or before September 8 of the year following the date of default. (b) If the tax collector sends reminder notices prior to the close of the fiscal year and annually sends a redemption notice of prior year due taxes, the delinquent notice described in subdivision (a) may be mailed only for those properties that have been tax-delinquent for three or more years and for which the latest reminder notice or redemption notice was returned to the tax collector as undeliverable. SEC. 5. (a) The Legislature finds and declares each of the following: (1) California is currently experiencing a severe shortage of affordable housing. According to the California Department of Housing and Community Development, currently about 2.4 million California households need some form of housing assistance, that is, those households are low-income and are overpaying for housing costs. According to the California Budget Project, statewide there are approximately 2.3 low-income renter households per affordable unit, or a shortage of 581,000 units. (2) Given this shortage of affordable housing, the state cannot afford to lose units from the marketplace due to deterioration and condemnation for building code violations. (3) Prevention of real property deterioration is a legitimate government interest, and funding for local programs that increase efforts to enforce building codes is an important tool in preventing affordable housing from being removed from the market. (b) The Legislature further finds and declares that there may be a link between real properties that are delinquent in payment of property taxes and building code violations, and that this issue is worthy of study. It is therefore the intent of the Legislature, pursuant to Section 7 of this act, to make available to the University of California data, with respect to tax-delinquent properties, collected by local tax collectors and described in Section 7 of this act. (c) The Legislature further finds and declares that there are costs incurred by local tax collectors in providing the information required for the study pursuant to Section 7 of this act, and that these costs may be offset by correspondingly eliminating unnecessary costs incurred by local tax collectors in fulfilling the notice requirements pursuant to Sections 3351 and 3371 of the Revenue and Taxation Code. Therefore, it is the intent of the Legislature, in amending Sections 3351 and 3371 of the Revenue and Taxation Code in this act, to offset the costs incurred by local tax collectors in providing the information required for the study pursuant to Section 7 of this act. SEC. 6. (a) The University of California may need to obtain data in order, to the extent possible, to study the following: (1) The breakdown of tax-delinquent properties by residential, commercial, and industrial properties. (2) The breakdown of tax-delinquent properties by length of delinquency. (3) The potential of tax-delinquent properties to provide affordable housing. (b) In order to obtain the data necessary to perform this study, the University of California shall notify the Controller, in writing, that it is requesting the data required to be published pursuant to Chapter 1 (commencing with Section 3351) of Part 6 of Division 1 of the Revenue and Taxation Code. (c) Within 14 days of receipt of the request for data from the University of California, the Controller shall request from county tax collectors for the most recently completed fiscal year and the current fiscal year the information requested pursuant to subdivision (b). The tax collectors shall provide the requested information for the most recently completed fiscal year within 14 days of receipt of the request and the information for the current fiscal year by the following September 15. The tax collectors shall transmit the requested information in electronic text format if possible. Data fields shall include, if possible, assessor's parcel number, situs address including ZIP Code, duration and amount of tax delinquency for each parcel, and associated zoning designations such as residential, commercial, or industrial. The Controller shall transmit that information to the University of California within 14 days of receipt of the information requested from the county tax collectors. (d) The University of California may not sell, rent, or exchange information it obtains pursuant to this section. SEC. 7. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because this act provides for offsetting savings to local agencies or school districts that result in no net costs to the local agencies or school districts, within the meaning of Section 17556 of the Government Code.