BILL NUMBER: AB 192 CHAPTERED 10/08/07 CHAPTER 312 FILED WITH SECRETARY OF STATE OCTOBER 8, 2007 APPROVED BY GOVERNOR OCTOBER 8, 2007 PASSED THE SENATE SEPTEMBER 7, 2007 PASSED THE ASSEMBLY SEPTEMBER 10, 2007 AMENDED IN SENATE SEPTEMBER 7, 2007 INTRODUCED BY Committee on Budget (Laird (Chair), Arambula, Beall, Berg, Brownley, Dymally, Feuer, Hayashi, Hernandez, Jones, Mullin, Ruskin, Swanson, and Wolk) JANUARY 25, 2007 An act to amend Section 11550 of, and to add Section 13997.7 to, the Government Code, and to amend Section 53545.13 of the Health and Safety Code, relating to state government, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 192, Committee on Budget. State government. (1) Existing law authorizes a salary of $91,054 to be paid to specified positions within state government, and authorizes an increase of that salary in any fiscal year in which a general salary increase is provided for state employees, as specified. This bill would include the State Chief Information Officer and the Secretary for Environmental Protection within these provisions. (2) Existing law provides that the Secretary of the Business, Transportation and Housing Agency has the power of general supervision for, and is directly responsible to the Governor for, the operations of each department, office, and unit within the Business, Transportation and Housing Agency. Existing law also establishes the Special Deposit Fund and the Small Business Expansion Fund in the State Treasury. Existing law provides that the Small Business Expansion Fund is continuously appropriated to the Business, Transportation and Housing Agency for specified purposes. This bill would require the secretary to administer the Economic Adjustment Assistance Grant, as the successor to the former Secretary of Technology, Trade and Commerce. This bill would also transfer funds held in trust in the Sudden and Severe Economic Dislocation Grant Account of the Special Deposit Fund to, and would also direct specified loan repayments to, the Small Business Expansion Fund, for specified purposes for use by the Business, Transportation and Housing Agency. By making these additional funds available for expenditure by the agency from a continuously appropriated fund, this bill would make an appropriation. (3) Existing law establishes the Infill Incentive Grant Program of 2007, that requires the Department of Housing and Community Development, upon a specified appropriation by the Legislature, to establish and administer a competitive grant program to allocate those funds to selected capital improvements projects relating to qualifying infill projects or qualifying infill areas, as defined. This bill would modify the affordability requirements for a qualifying infill project or qualifying infill area. (4) This 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 11550 of the Government Code is amended to read: 11550. (a) Effective January 1, 1988, an annual salary of ninety-one thousand fifty-four dollars ($91,054) shall be paid to each of the following: (1) Director of Finance. (2) Secretary of Business, Transportation and Housing. (3) Secretary of the Resources Agency. (4) Secretary of California Health and Human Services. (5) Secretary of State and Consumer Services. (6) Commissioner of the California Highway Patrol. (7) Secretary of the Department of Corrections and Rehabilitation. (8) Secretary of Food and Agriculture. (9) Secretary of Veterans Affairs. (10) Secretary of Labor and Workforce Development. (11) State Chief Information Officer. (12) Secretary of Environmental Protection. (b) The annual compensation provided by this section shall be increased in any fiscal year in which a general salary increase is provided for state employees. The amount of the increase provided by this section shall be comparable to, but shall not exceed, the percentage of the general salary increases provided for state employees during that fiscal year. SEC. 2. Section 13997.7 is added to the Government Code, to read: 13997.7. (a) Notwithstanding any other provision of law, effective January 1, 2008, the Economic Adjustment Assistance Grant funded through the United States Economic Development Administration under Title IX of the Public Works and Economic Development Act of 1965 (Grant No. 07-19-02709 and 07-19-2709.1) shall be administered by the Secretary of Business, Transportation and Housing, and, for the purpose of state administration of this grant, the secretary shall be deemed to be the successor to the former Secretary of Technology, Trade and Commerce. The secretary may assign and contract administration of the grant to a public agency created pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1. (b) On January 1, 2008, all federal moneys held in the Sudden and Severe Economic Dislocation Grant Account within the Special Deposit Fund are hereby transferred to the Small Business Expansion Fund created pursuant to Section 14030 of the Corporations Code for expenditure by the Business, Transportation and Housing Agency pursuant to Article 9 (commencing with Section 14070) of the Corporations Code for purposes of the Sudden and Severe Economic Dislocation Grant program, or other purposes permitted by the cognizant federal agency. (c) All loan repayments received on or after January 1, 2008, for the Sudden and Severe Economic Dislocation Grant program loans issued pursuant to former Section 15327 (repealed by Section 1.8 of Chapter 229 of the Statutes of 2003 (AB 1757)) and this section, shall be deposited into the Small Business Expansion Fund and shall be available to the Business, Transportation and Housing Agency for expenditure pursuant to the provisions of Article 9 (commencing with Section 14070) of the Corporations Code for the Sudden and Severe Economic Dislocation Grant program, or other purposes permitted by the cognizant federal agency. SEC. 3. Section 53545.13 of the Health and Safety Code is amended to read: 53545.13. (a) The Infill Incentive Grant Program of 2007 is hereby established to be administered by the department. (b) Upon appropriation of funds by the Legislature for the purpose of implementing paragraph (1) of subdivision (b) of Section 53545, the department shall establish and administer a competitive grant program to allocate those funds to selected capital improvement projects that are an integral part of, or necessary to facilitate the development of, a qualifying infill project or a qualifying infill area. (c) A qualifying infill project or qualifying infill area for which a capital improvement project grant may be awarded shall meet all of the following conditions: (1) Be located in a city, county, or city and county, in which the general plan of the city, county, or city and county, has an adopted housing element that has been found by the department, pursuant to Section 65585 of the Government Code, to be in compliance with the requirements of Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code. (2) Include not less than 15 percent of affordable units, as follows: (A) For projects that contain both rental and ownership units, units of either or both product types may be included in the calculation of the affordability criteria. (B) (i) To the extent included in a project grant application, for the purpose of calculating the percentage of affordable units, the department may consider the entire master development in which the development seeking grant funding is included. (ii) Where applicable, an applicant may include a replacement housing plan to ensure that dwelling units housing persons and families of low or moderate income are not removed from the low- and moderate-income housing market. Residential units to be replaced may not be counted toward meeting the affordability threshold required for eligibility for funding under this section. (C) For the purposes of this subdivision, "affordable unit" means a unit that is made available at an affordable rent, as defined in Section 50053, to a household earning no more than 60 percent of the area median income or at an affordable housing cost, as defined in Section 50052.5, to a household earning no more than 120 percent of the area median income. Rental units shall be subject to a recorded covenant that ensures affordability for at least 55 years. Ownership units shall initially be sold to and occupied by a qualified household, and subject to a recorded covenant that includes either a resale restriction for at least 30 years or equity sharing upon resale. (D) A qualifying infill project or qualifying infill area for which a disposition and development agreement or other project- or area-specific agreement between the developer and the local agency having jurisdiction over the project has been executed on or before the effective date of the act adding this section, shall be deemed to meet the affordability requirement of this paragraph (2) if the agreement includes affordability covenants that subject the project or area to the production of affordable units for very low, low-, or moderate-income households. (3) Include average residential densities on the parcels to be developed that are equal to or greater than the densities described in subparagraph (B) of paragraph (3) of subdivision (c) of Section 65583.2 of the Government Code, except that a project located in a rural area as defined in Section 50199.21 shall include average residential densities on the parcels to be developed of at least 10 units per acre. (4) Be located in an area designated for mixed-use or residential development pursuant to one of the following adopted plans: (A) A general plan adopted pursuant to Section 65300 of the Government Code. (B) A project area redevelopment plan approved pursuant to Section 33330. (C) A regional blueprint plan as defined in the California Regional Blueprint Planning Program administered by the Business, Transportation and Housing Agency, or a regional plan as defined in Section 65060.7 of the Government Code. (5) For qualifying infill projects or qualifying infill areas located in a redevelopment project area, meet the requirements contained in subdivision (a) of Section 33413. (d) In its review and ranking of applications for the award of capital improvement project grants, the department shall rank the affected qualifying infill projects and qualifying infill areas based on the following priorities: (1) Project readiness, which shall include all of the following: (A) A demonstration that the project or area development can complete environmental review and secure necessary entitlements from the local jurisdiction within a reasonable period of time following the submittal of a grant application. (B) A demonstration that the eligible applicant can secure sufficient funding commitments derived from sources other than this part for the timely development of a qualifying infill project or development of a qualifying infill area. (C) A demonstration that the project or area development has sufficient local support to achieve the proposed improvement. (2) The depth and duration of the affordability of the housing proposed for a qualifying infill project or qualifying infill area. (3) The extent to which the average residential densities on the parcels to be developed exceed the density standards contained in paragraph (3) of subdivision (c). (4) The qualifying infill project's or qualifying infill area's inclusion of, or proximity or accessibility to, a transit station or major transit stop. (5) The proximity of housing to parks, employment or retail centers, schools, or social services. (6) The qualifying infill project or qualifying infill area location's consistency with an adopted regional blueprint plan or other adopted regional growth plan intended to foster efficient land use. (e) In allocating funds pursuant to this section, the department, to the maximum extent feasible, shall ensure a reasonable geographic distribution of funds. (f) Funds awarded pursuant to this section shall supplement, not supplant, other available funding. (g) (1) The department shall adopt guidelines for the operation of the grant program, including guidelines to ensure the tax-exempt status of the bonds issued pursuant to this part, and may administer the program under those guidelines. (2) The guidelines shall include provisions for the reversion of grant awards that are not encumbered within four years of the fiscal year in which an award was made, and for the recapture of grants awarded, but for which development of the related housing units has not progressed in a reasonable period of time from the date of the grant award, as determined by the department. (3) The guidelines shall not be subject to the requirements of Chapter 3.5 (commencing with Section 11340) of Division 3 of Title 2 of the Government Code. (h) For each fiscal year within the duration of the grant program, the department shall include within the report to the Legislature, required by Section 50408, information on its activities relating to the grant program. The report shall include, but is not limited to, the following information: (1) A summary of the projects that received grants under the program for each fiscal year that grants were awarded. (2) The description, location, and estimated date of completion for each project that received a grant award under the program. (3) An update on the status of each project that received a grant award under the program, and the number of housing units created or facilitated by the program. SEC. 4. 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: In order to compensate certain state officials, authorize a successor state agency to administer a federal grant program, and modify the provisions of a competitive grant program as quickly as possible, it is necessary for this act to take effect immediately.