BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 221
                                                                  Page  1

          Date of Hearing:   April 13, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                 AB 221 (Carter) - As Introduced:  February 1, 2011 

          Policy Committee:                              Housing and 
          Community Development                         Vote: 7-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill allows Emergency Housing and Assistance Program (EHAP) 
          funds approved by the voters in the Housing and Emergency 
          Shelter Trust Fund Acts of 2002 and 2006 to be used for 
          supportive housing programs.   

           FISCAL EFFECT  

          The costs for Housing and Community Development (HCD) to include 
          supportive housing projects in future projects would be minor 
          and absorbable within existing resources. 

           COMMENTS  

           1)Rationale  . This legislation allows more flexibility for the 
            bond funding made available through Proposition 1C and 
            Proposition 46 by allowing EHAP - Capitol Development funding 
            (bricks and mortar funding for emergency housing shelters) to 
            also be used for permanent multi-family low-income supportive 
            housing projects.  The author argues this flexibility is 
            necessary because efforts to combat homelessness have taken a 
            significant shift away from providing temporary emergency 
            housing toward an effort to find long-term housing that is 
            coupled with supportive services such as mental health 
            counseling, workforce training and alcohol and drug treatment. 


           2)Multifamily Housing Program - Supportive Housing Program  . MHP 
            provides funding for construction, rehabilitation or 
            conversion multi-family housing projects for low- and moderate 
            income people. Within MHP there is a supportive housing 








                                                                  AB 221
                                                                  Page  2

            program which provides funding for projects that provide 
            supportive services coupled with housing. Target populations 
            include special needs populations, homeless and homeless 
            youth.  Funding is provided as low-interest loans that 
            partially fund the cost of construction and require the 
            housing remain affordable for 55 years.

           3)Bill raises possible legal issues.   Article 16, Section 1 of 
            the California Constitution provides that general obligation 
            bond funds shall be applied only to the specific object 
            therein stated or to the payment of debt thereby created.  
            Propositions 46 and 1C do allow for amendment by the 
            Legislature but within restrictions.  This bill raises a 
            question of whether granting flexibility for funding is 
            consistent with the constitutional restriction or a 
            permissible amendment of the enabling statutes for the 
            programs.

           4)Related Legislation  .  This bill is a reintroduction of 
            AB 2536 (Carter) from last session.  AB 2536 (Carter) 
            was vetoed by Governor Schwarzenegger noting that the 
            bill would change the use of housing bonds contrary to 
            the intent of the voters in approving Proposition 1C and 
            that it is not consistent with the intent of the voters 
            to redirect these funds to provide services to families 
            in permanent housing.



           Analysis Prepared by  :    Roger Dunstan / APPR. / (916) 319-2081