BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 562|
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                                    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 
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             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 

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             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 

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             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

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