BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 562| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ CONSENT Bill No: SB 562 Author: Senate Transportation and Housing Committee Amended: 3/29/11 Vote: 21 SENATE TRANS. & HOUSING COMMITTEE : 9-0, 4/12/11 AYES: DeSaulnier, Gaines, Harman, Huff, Kehoe, Lowenthal, Pavley, Rubio, Simitian SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SUBJECT : Transportation and Housing Committee omnibus bill of 2011 SOURCE : Author DIGEST : This bill makes non-controversial changes to sections of law relating to housing. ANALYSIS : This bill includes the following provisions: 1. CDLAC cleanup ÝSection 1] . The California Debt Limit Allocation Committee (CDLAC) administers the tax-exempt private activity bond program for the state. Current law states that if a bond issuer that received a private activity bond allocation from CDLAC ultimately issues bonds in an amount less than what was awarded by CDLAC, then a proportional share of a performance deposit held for that issuance shall be forfeited to CDLAC. The intent of the performance deposit is to insure that bond CONTINUED SB 562 Page 2 issuers make use of the limitedly available private activity bond allocation awarded to them for a given project or program. The reality of project finance is that the funding sources are often in-flux up to the day of bond issuance, so bond issuers will often apply to CDLAC for an allocation amount slightly above what they believe at the time they may eventually need. This slight difference is the industry norm and reduces the need for the bond issuer to reapply to CDLAC for small amounts of additional allocation if needed. Historically, CDLAC's policy has been that if the issuance amount was at least 80 percent of the awarded allocation amount, then no portion of the performance deposit would be forfeited. The amendments revise statute to reflect this past CDLAC practice. CDLAC also seeks to clarify its option to waive the forfeiture of the performance deposit when some portion of the bonds have been issued if the committee should determine there is good cause to do so. Existing statute only provides for this discretion when none of the bonds have been issued. This creates a situation where an applicant may be able to have its performance deposit returned if no bonds are issued but cannot have it returned if a portion of the bonds are issued. The amendments provide CDLAC with the ability to return the deposit when less than 100 percent of the allocation amount is issued but not when no bonds are issued. ÝDiane Stanton, State Treasurer's Office] 2. Manufactured Home Recovery Fund ÝSection 2] . Legislative amendments in 2004 expanded the ability of aggrieved buyers and sellers of manufactured homes to file claims and simplified some processes, and the current economy has created additional purchase and sales problems. Currently, there is roughly $800,000 in the Manufactured Home Recovery Fund but roughly the same amount of pending claims. When the fund runs low on cash, it reduces the timeliness of potential payments when claims are found to be valid and has a spiraling effect on even later claims. Current law that has been in place for 30 years, however, allows for a reduction in the fee whenever the balance exceeds $1 million. The amendments increase the threshold at which fees may be CONTINUED SB 562 Page 3 reduced from $1 million to $2 million. ÝMark Stivers, Senate Transportation and Housing Committee] 3. Mobilehome Parks Act cleanup ÝSections 3, 4, and 5] . The Mobilehome Parks Act governs health and safety issues in mobilehome parks. The act includes an outdated term that is no longer used: commercial coach. The modern term is commercial modular. The amendments update the definitions in the act to reflect this modern term. ÝDeborah Gore, Department of Housing and Community Development] 4. Special Occupancy Parks Act cross reference ÝSection 6] . Current law makes various violations of the Special Occupancy Parks Act a misdemeanor. When issuing a citation, an enforcement agency must include a statement about the relevant penalties. Current statute contains an incorrect cross-reference to the existing penalty section. The amendments corrects this cross-reference. ÝDeborah Gore, Department of Housing and Community Development] 5. Repeal outdated statute on Redding Veterans' Home ÝSection 7] . Current law allows redevelopment agencies in Shasta County to borrow and use up to $2,300,000 from their Low and Moderate Income Housing Funds to provide financial assistance for the acquisition of property for a veterans home in the City of Redding. This land has been purchased with non-redevelopment funds, and the home is currently under construction. This section is no longer needed. The amendments repeal this obsolete section of law. ÝPeter Detwiler, Senate Local Government Committee] 6. Seismic Safety Retrofits ÝSection 8] . Current law dealing with seismic safety retrofit rehabilitation or alternations relies on building code references no longer adopted in California. The amendments update the requirements to refer to current building codes in use in California. ÝMark Stivers, Senate Transportation and Housing Committee] 7. Strong Motion Instrumentation Fee cleanup ÝSections 9 and 10] . Current law requires each applicant for a CONTINUED SB 562 Page 4 building permit to pay a minimal fee (1/100th or 2/100th of a percent of the value of the work) to support earthquake mapping work. Two separate sections of law require that these fee revenues be deposited into the Strong-Motion Instrumentation and Seismic Hazards Mapping Fund. The amendments combine these two repetitive sections into one. ÝMark Stivers, Senate Transportation and Housing Committee] Comments Purpose of the bill . The Senate Transportation and Housing Committee is authoring this bill as a means of combining multiple, non-controversial changes to statutes into one bill, so that the Legislature can make minor amendments in a cost-effective manner. There is no known opposition to any item in the bill, and if concerns arise that cannot be resolved, the provision of concern will be deleted from the bill. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No RJG:kc 5/3/11 Senate Floor Analyses SUPPORT/OPPOSITION: NONE RECEIVED **** END **** CONTINUED