BILL NUMBER: AB 1512 CHAPTERED 09/22/05 CHAPTER 338 FILED WITH SECRETARY OF STATE SEPTEMBER 22, 2005 APPROVED BY GOVERNOR SEPTEMBER 22, 2005 PASSED THE ASSEMBLY AUGUST 30, 2005 PASSED THE SENATE AUGUST 29, 2005 AMENDED IN SENATE AUGUST 24, 2005 AMENDED IN SENATE AUGUST 16, 2005 AMENDED IN ASSEMBLY MAY 31, 2005 AMENDED IN ASSEMBLY MAY 4, 2005 AMENDED IN ASSEMBLY APRIL 20, 2005 AMENDED IN ASSEMBLY APRIL 6, 2005 INTRODUCED BY Assembly Member Garcia (Coauthor: Senator Battin) FEBRUARY 22, 2005 An act to amend Sections 50911 and 51504 of the Health and Safety Code, relating to housing, and making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST AB 1512, Garcia California Housing Finance Agency. (1) Existing law authorizes the Executive Director of the California Housing Finance Agency to employ as general counsel for the agency an attorney at law licensed in this state to advise the board of the agency, the chairperson, and the executive director when so requested, with regard to all matters in connection with the powers and duties of the agency and its board members and officers. This bill would authorize the general counsel, in his or her absence, to designate someone else to act in his or her behalf. (2) Existing law requires the California Housing Finance Agency to administer the California Homebuyer's Downpayment Assistance Program for the purpose of assisting first-time low- and moderate-income home buyers utilizing existing mortgage financing. Existing law establishes an expenditure allocation schedule of housing bond revenues in the Housing and Emergency Shelter Trust Fund. One of those allocations is the transfer of $85,000,000 to the California Housing Loan Insurance Fund for bond and loan insurance purposes, as specified. The schedule provides that funds not utilized for those purposes within 30 months shall revert for general use in the California Homebuyer's Downpayment Assistance Program. Under existing law, the agency is authorized to make development loans, construction loans, property improvement loans, mortgage loans, and advances in anticipation of these loans to housing sponsors to finance housing developments and residential structures. This bill would authorize the agency, at its discretion, to use not more than $75,000,000 of the reversion funds available pursuant to the downpayment assistance program to finance, through short-term loans, the acquisition of land and construction and development of for-sale residential structures, pursuant to its authority under specified authority governing loans for housing developments. The bill would require the agency to make certain downpayment assistance a priority use for these funds, but not downpayment assistance for the purchase of a residence in a community revitalization area targeted by a nonprofit organization as a neighborhood in need of economic stimulation, renovation, and rehabilitation, as specified. By authorizing continuously appropriated funds to be used for this additional purpose, the bill would make an appropriation. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 50911 of the Health and Safety Code is amended to read: 50911. (a) Notwithstanding Sections 11042 and 11043 of the Government Code, the executive director may employ as general counsel for the agency an attorney at law licensed in this state. The general counsel, or in his or her absence, the general counsel's designee, shall advise the board, the chairperson, and the executive director, when so requested, with regard to all matters in connection with the powers and duties of the agency and the board members and officers thereof. The general counsel shall serve as secretary to the board and shall perform all duties and services as general counsel to the agency that the agency may require of that person. (b) Except as provided in Section 11040 of the Government Code, the Attorney General shall represent and appear for the people of the state and the agency in all court proceedings involving any question under this division or any order or act of the agency. However, the agency may also employ private counsel to assist in any court proceeding. (c) Notwithstanding Sections 11042 and 11043 of the Government Code, the executive director may appoint as bond counsel for the agency an attorney or attorneys. Nothing in this section or any other provision of law shall preclude the appointment of more than one attorney to serve as bond counsel. However, at all times at least one attorney shall be licensed to practice law in this state. If the agency appoints more than one bond counsel for a bond issue, the combined fees paid to all bond counsel shall not exceed those fees that would have been paid had only one bond counsel been appointed. (d) Under the authority of this section, the executive director may appoint or retain an attorney or attorneys to undertake other appropriate legal studies and assignments not in conflict with this section. SEC. 2. Section 51504 of the Health and Safety Code is amended to read: 51504. (a) The agency shall administer a downpayment assistance program that includes, but is not limited to, all of the following: (1) Downpayment assistance shall include, but not be limited to, a deferred-payment, low-interest, junior mortgage loan to reduce the principal and interest payments and make financing affordable to first-time low- and moderate-income home buyers. (2) (A) Except as provided in subparagraph (B) or (C), the amount of downpayment assistance shall not exceed 3 percent of the home sales price. (B) The amount of downpayment assistance for a new home within an infill opportunity zone, as defined in Section 65088.1 of the Government Code, a transit village development district, as defined in Section 65460.4 of the Government Code, or a transit-oriented development specific plan area, as defined in paragraph (6), shall not exceed 5 percent of the purchase price or the appraised value, whichever amount is less, of the new home. The borrower of the downpayment assistance shall provide the lender originating the loan with a certification from the local government agency administering the infill opportunity zone, the transit village development district, or the transit-oriented development specific plan area that states that the property involved in the loan transaction is within the boundaries of either the infill opportunity zone, the transit village development district, or the transit-oriented development specific plan area. (C) Notwithstanding paragraph (1), the agency may, but is not required to, provide downpayment assistance that does not exceed 6 percent of the home sales price to first-time low-income home buyers who, as documented to the agency by a nonprofit organization that is certified and funded to provide home ownership counseling by a federally funded national nonprofit corporation, are purchasing a residence in a community revitalization area targeted by the nonprofit organization as a neighborhood in need of economic stimulation, renovation, and rehabilitation through efforts that include increased home ownership opportunities for low-income families. The agency shall not use more than six million dollars ($6,000,000) in funds made available pursuant to Section 53533 for the purposes of this paragraph. (3) The amount of the downpayment assistance shall be secured by a deed of trust in a junior position to the primary financing provided. The term of the loan for the downpayment assistance shall not exceed the term of the primary loan. (4) The amount of the downpayment assistance shall be due and payable at the end of the term or upon sale of or refinancing of the home. The borrower may refinance the mortgages on the home provided that the principal and accrued interest on the junior mortgage loan securing the downpayment assistance are repaid in full. All repayments shall be made to the agency to be reallocated for the purposes of this chapter. (5) The agency may use up to 5 percent of the funds appropriated by the Legislature for purposes of this chapter to administer this program. (6) For the purposes of this section, "transit-oriented development specific plan area" means a specific plan that meets the criteria set forth in Section 65451 of the Government Code, is centered around a rail or light-rail station, ferry terminal, bus hub, or bus transfer station, and is intended to achieve a higher density use of land that facilitates use of the transit station. (b) In addition to the downpayment assistance program authorized by subdivision (a), the agency may, at its discretion, use not more than seventy-five million dollars ($75,000,000) of the funds available pursuant to this chapter to finance the acquisition of land and the construction and development of for-sale residential structures, through short-term loans pursuant to its authority pursuant to Section 51100; however, the agency shall make downpayment assistance provided pursuant to paragraph (1), subparagraphs (A) and (B) of paragraph (2), and paragraphs (3) to (5), inclusive, of subdivision (a) the priority use for these funds. A loan made pursuant to this section is not subject to the provisions of Article 4 (commencing with Section 51175) of Chapter 5.