BILL NUMBER: AB 1461 CHAPTERED 09/06/05 CHAPTER 197 FILED WITH SECRETARY OF STATE SEPTEMBER 6, 2005 APPROVED BY GOVERNOR SEPTEMBER 6, 2005 PASSED THE ASSEMBLY AUGUST 22, 2005 PASSED THE SENATE AUGUST 18, 2005 AMENDED IN SENATE JUNE 13, 2005 AMENDED IN ASSEMBLY APRIL 25, 2005 AMENDED IN ASSEMBLY APRIL 20, 2005 INTRODUCED BY Assembly Member Salinas FEBRUARY 22, 2005 An act to amend Sections 50825 and 50826 of, and to amend, repeal, and add Sections 50832 and 50833 of, the Health and Safety Code, relating to community development. LEGISLATIVE COUNSEL'S DIGEST AB 1461, Salinas Community Development Block Grant Program Funds. Under existing law, the Department of Housing and Community Development allocates federal community development block grant funds to cities and counties. Existing law specifies the percentage of the federal community development block grant funds that are to be used for economic development projects and programs, housing for persons and families of low or moderate income or for purposes directly related to the provision or improvement of housing opportunities for these persons and families, and for cities and counties that apply on behalf of certain Indian tribes. Existing law requires 10% of the total amount of funds to be awarded to small cities or counties for specified purposes. Existing law sets forth the maximum amount of the grants. This bill would, until January 1, 2009, delete the limits on the maximum amount of grants. The bill would require the Department of Housing and Community Development, until January 1, 2009, to determine, and announce in the applicable Notice of Funding Availability, the maximum amounts. The bill would, until January 1, 2009, delete the requirement that 10% of the total amount of funds be awarded to small cities and counties and would instead require the department to determine the percentage and maximum amount of these funds that would be allocated to small cities and counties. The bill would require the department to submit to the Legislature a report that indicates the number, amounts, and types of grants provided under these changes. The bill would reinstate existing law on January 1, 2009. The bill would make related conforming changes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 50825 of the Health and Safety Code is amended to read: 50825. It is the intent of the Legislature in enacting this chapter to ensure that funds allocated to the state pursuant to the federal State Community Development Block Grant Program (42 U.S.C. 5306(d)), and administered by the department, be of maximum benefit in meeting the housing and economic development needs of persons and families of low or moderate income. The Legislature intends that these funds be provided to eligible cities and counties that encourage new housing developments and economic development and which need the funds to support those developments. It is the intent of the Legislature to reaffirm established state policy that each eligible city or county contribute to meeting the statewide housing goals, or contribute to meeting the state's urgent need to halt the flow of jobs out of California by working to retain and expand existing businesses and attract new businesses that provide jobs to low- and moderate-income persons and families, or do both, and that funds allocated pursuant to this chapter be distributed accordingly. SEC. 2. Section 50826 of the Health and Safety Code is amended to read: 50826. As used in this chapter: (a) "Eligible city or county" means an area which is not a metropolitan city or part of an urban county, as defined by paragraphs (4) and (6), respectively, of subsection (a) of Section 5302 of Title 42 of the United States Code. (b) "NOFA" means notice of funding availability, a public announcement that an estimated amount of funding will be awarded by a department program according to specified criteria and schedules. (c) "Persons and families of low or moderate income" means persons and families whose income does not exceed 80 percent of the area median income, adjusted for family size, as determined pursuant to regulations adopted by the department. (d) "Program" means the State Community Development Block Grant Program created pursuant to federal law (42 U.S.C. 5301, et seq.). SEC. 3. Section 50832 of the Health and Safety Code is amended to read: 50832. (a) In order to ensure that a city or county may apply for both economic development and general program grants pursuant to this chapter in the same year, each applicant shall have a maximum grant request limitation as determined by the department and announced in the applicable NOFA, excluding general allocation planning and technical assistance grants and economic development allocation planning and technical assistance grants made available under Section 50833, of which a maximum amount as determined by the department and announced in the applicable NOFA, per year may be used for either general program or economic development applications. These limitations may be waived for the economic development allocation based upon available economic development funds after September 1 of each year. The department shall aggressively inform eligible cities and counties of the eligibility criteria and requirements under this section and in Section 50833. (b) Except for applications specified in Section 50832.1, applications for all activities or set-asides under this section and Section 50833 shall be evaluated on a first-in, first-served basis. (c) For all economic development applications under this section or Section 50833, including economic development assistance grants, the department shall develop project standards and rating factors which meet the minimum requirements of federal statutes, including a jobs-for-dollars test of thirty-five thousand dollars ($35,000) per job created or retained. In addition to the low- and moderate-income persons or families criteria established in subdivision (b) of Section 50826 and Sections 50827 and 50828, the department shall also utilize as criteria for the economic development allocation the federal standards of "blight" and "urgent need" under this section, Section 50832.1, and Section 50833. (d) A jurisdiction may submit multiyear proposals for a period not exceeding three years in duration. (e) Notwithstanding Section 7550.5 of the Government Code, by December 31, 2007, the department shall submit to the Legislature a report that indicates the number, amounts, and types of grants provided under this section. (f) This section shall remain in effect only until January 1, 2009, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2009, deletes or extends that date. SEC. 4. Section 50832 is added to the Health and Safety Code, to read: 50832. (a) In order to ensure that a city or county may apply for both economic development and general program grants pursuant to this chapter in the same year, each applicant shall have a maximum grant request limitation of eight hundred thousand dollars ($800,000) per year, excluding general allocation planning and technical assistance grants and economic development allocation planning and technical assistance grants made available under Section 50833, of which a maximum of five hundred thousand dollars ($500,000) per year may be used for either housing or economic development applications. These limitations may be waived for the economic development allocation based upon available economic development funds after September 1 of each year. The department shall aggressively inform eligible cities and counties of the eligibility criteria and requirements under this section and in Section 50833. (b) Except for applications specified in Section 50832.1, applications for all activities or set-asides under this section and Section 50833 shall be evaluated on a first-in, first-served basis. (c) For all economic development applications under this section or Section 50833, including economic development assistance grants, the department shall develop project standards and rating factors which meet the minimum requirements of federal statutes, including a jobs-for-dollars test of thirty-five thousand dollars ($35,000) per job created or retained. In addition to the low- and moderate-income persons or families criteria established in subdivision (b) of Section 50826 and Sections 50827 and 50828, the department shall also utilize as criteria for the economic development allocation the federal standards of "blight" and "urgent need" under this section, Section 50832.1, and Section 50833. (d) A jurisdiction may submit multiyear proposals for a period not exceeding three years in duration. (e) This section shall become operative January 1, 2009. SEC. 5. Section 50833 of the Health and Safety Code is amended to read: 50833. (a) The department shall determine and announce in the applicable NOFA the percentage of the total amount of the State Block Grant Program funds set aside for economic development that shall be allocated to make economic development planning and technical assistance grants to eligible small cities or counties for business attraction, retention, and expansion programs for the development of local economic development strategies, predevelopment grant feasibility studies, and downtown revitalization programs. Eligible small cities or counties may contract with public agencies or nonprofit economic development corporations and other eligible subgrantees or for profit corporations or entities to provide these services. Each applicant shall be required to provide a cash match of up to 25 percent of the total amount requested. A technical assistance grant received under this set-aside is in addition to the city or county ceiling, under Section 50832, or its ability to apply under the economic development or general program set-asides. The department shall determine and announce in the applicable NOFA the maximum per year grant amount. Each applicant shall not receive more than two grants per year and shall be eligible to apply each year, although no applicant shall receive grants in excess of the maximum amount determined by the department and announced in the applicable NOFA in any one year. Funds not applied for or allocated under this section may be used for other economic development purposes under Sections 50832 and 50832.1. (b) The department shall determine and announce in the applicable NOFA the percentage of the total amount of the State Block Grant Program funds not used for economic development that shall be set aside to make technical assistance grants to eligible small cities or counties for purposes including, but not limited to: inventory of housing needing rehabilitation in the district, income surveys of area residents, and any general studies of housing needs in the district. Each applicant shall be required to provide a cash match of up to 25 percent of the total amount requested. A technical assistance grant received under this set-aside is in addition to the city or county ceiling or its ability to apply under the economic development or general program set-asides. Unexpended funds allocated under this section shall revert to the general program, but not to the economic development set-aside. The department shall determine and announce in the applicable NOFA the maximum grant amount per application. Each applicant shall not receive more than two grants per year and shall be eligible to apply each year, although no applicant shall receive grants in excess of the maximum amount determined by the department and announced in the applicable NOFA in any one year. (c) If, under federal law, the economic development planning and technical assistance grants and the general allocation planning and assistance grants are considered to be administrative expenditures, the department may reduce the percentages of the set-asides by up to the amount necessary to remain within the allowable limits for administrative expenditures. (d) Two or more jurisdictions may pool their funds and make a joint application for the same project. (e) General administrative activity planning studies shall not be counted against allocations under this section. (f) Notwithstanding Section 7550.5 of the Government Code, by December 31, 2007, the department shall submit to the Legislature a report that indicates the number, amounts, and types of grants provided under this section. (g) This section shall remain in effect only until January 1, 2009, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2009, deletes or extends that date. SEC. 6. Section 50833 is added to the Health and Safety Code, to read: 50833. (a) Ten percent of the total amount of the State Block Grant Program funds set aside for economic development shall be allocated to make economic development planning and technical assistance grants to eligible small cities or counties for business attraction, retention, and expansion programs for the development of local economic development strategies, predevelopment grant feasibility studies, and downtown revitalization programs. Eligible small cities or counties may contract with public agencies or nonprofit economic development corporations and other eligible subgrantees or for profit corporations or entities to provide these services. Each applicant shall be required to provide a cash match of up to 25 percent of the total amount requested. A technical assistance grant received under this 10-percent set-aside is in addition to the city or county ceiling, under Section 50832, or its ability to apply under the economic development or general program set-asides. The maximum grants per year shall be thirty-five thousand dollars ($35,000) per project. Each applicant shall not receive more than two grants per year and shall be eligible to apply each year, although no applicant shall receive grants in excess of thirty-five thousand dollars ($35,000) in any one year. Funds not applied for or allocated under this section may be used for other economic development purposes under Sections 50832 and 50832.1. (b) Ten percent of the total amount of the State Block Grant Program funds not used for economic development shall be set aside to make technical assistance grants to eligible small cities or counties for purposes including, but not limited to: inventory of housing needing rehabilitation in the district, income surveys of area residents, and any general studies of housing needs in the district. Each applicant shall be required to provide a cash match of up to 25 percent of the total amount requested. A technical assistance grant received under this 10-percent set-aside is in addition to the city or county ceiling or its ability to apply under the economic development or general program set-asides. Unexpended funds allocated under this section shall revert to the general program, but not to the economic development set-aside. The maximum grant per application shall be thirty-five thousand dollars ($35,000) per project. Each applicant shall not receive more than two grants per year and shall be eligible to apply each year, although no applicant shall receive grants in excess of thirty-five thousand dollars ($35,000) in any one year. (c) If, under federal law, the 10-percent economic assistance grants and the 10-percent general program assistance grants are considered to be administrative expenditures, the department may reduce the percentages of the set-asides by up to the amount necessary to remain within the allowable limits for administrative expenditures. (d) Two or more jurisdictions may pool their funds and make a joint application for the same project. (e) General administrative activity planning studies shall not be counted against allocations under this section. (f) This section shall become operative January 1, 2009.