BILL NUMBER: AB 532 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 3, 2013
AMENDED IN SENATE JULY 9, 2013
AMENDED IN ASSEMBLY APRIL 4, 2013
INTRODUCED BY Assembly Member Gordon
(Coauthors: Assembly Members Achadjian and Fong)
(Coauthor: Senator Hill)
FEBRUARY 20, 2013
An act to amend Sections 50843.5 and 53545.9 of the Health and
Safety Code, relating to housing, making an appropriation therefor,
and declaring the urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 532, as amended, Gordon. Local Housing Trust Fund.
Existing law establishes the Local Housing Trust Fund Matching
Grant Program for the purpose of supporting local housing trust funds
dedicated to the creation or preservation of affordable housing.
Existing law requires the Department of Housing and Community
Development to make available the amount of $35,000,000 for the Local
Housing Trust Fund Matching Grant Program, from the continuously
appropriated Housing and Emergency Shelter Trust Fund of 2006.
Under the grant program, the department is authorized to make
matching grants available to cities, counties, cities and counties,
and existing charitable nonprofit organizations that have created,
funded, and operated housing trust funds. The minimum allocation to a
program applicant is $1,000,000 for existing trust funds, or
$500,000 for newly established housing trust funds. The maximum
allocation for any applicant is $2,000,000. Under existing law, all
funds provided under the grant program are to be matched on a
dollar-for-dollar basis with moneys that are not required by any
state or federal law to be spent on housing.
This bill would revise the law applicable to the above grant
program, including (1) reducing the maximum allocation to $1,000,000
per notice of funding availability for an existing
trust for which the matching funds come from a new revenue source
identified or created on or after June 30, 2012 ,
(2) revising funding priorities for certain types of local housing
trust funds, and (3) revising requirements relative to deed
restrictions and equity sharing agreements applicable to for-sale
housing projects or units within for-sale housing projects.
Under existing law, an applicant is required to continue funding
the local housing trust fund from identified local sources, and
continue the trust in operation for a period of no less than 5 years
from the date of award.
This bill would extend any award to a local housing trust that was
under contract on January 1, 2013, by 12 months.
Existing law requires 50% of the funds allocated to the Local
Housing Trust Fund Matching Grant Program to be made available
exclusively for newly established housing trust funds. Existing law
requires funds set aside for newly established housing trust funds to
be available for encumbrance for 42 months and, after that time, to
revert to another specified housing fund.
This bill would remove the above restrictions, making the funds
continuously available for purposes of the program and not reverting
to another fund, thus making an appropriation. The bill also would
authorize funding for a housing trust fund that had previously
received a grant under the program.
Under existing law, the department awards funds under the grant
program through the issuance of a Notice of Funding Availability
(NOFA), as specified.
This bill would require the department to issue a new NOFA for new
trusts, as defined, no later than by
June 30, 2014.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 50843.5 of the Health and Safety Code is
amended to read:
50843.5. (a) Subject to the availability of funding, the
department shall make matching grants available to cities, counties,
cities and counties, and charitable nonprofit organizations organized
under Section 501(c)(3) of the Internal Revenue Code that have
created and are operating or will operate housing trust funds. These
funds shall be awarded through the issuance of a Notice of Funding
Availability (NOFA).
(1) Applicants that provide matching funds from a source or
sources other than impact fees on residential development shall
receive a priority for funding.
(2) The department shall set aside funding for new trusts, as
defined by the department in the NOFA. Notwithstanding any other law,
the department shall issue a new NOFA no later than
by June 30, 2014, for new trusts, and, for
purposes of this NOFA, a new trust shall include an existing trust
for which the matching funds come from a new revenue source
identified or created on or after June 30, 2012. For purposes of this
paragraph, a new revenue source shall include, but is not limited
to, a new tax, fee, contribution of public or private funds not
already dedicated to housing, or an increase in an existing tax or
fee directly adopted by a city, county, or city and county. The
department may issue this NOFA pursuant to guidelines that shall not
be subject to the requirements of Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code.
(b) Housing trusts eligible for funding under this section shall
have the following characteristics:
(1) Utilization of a public or joint public and private fund
established by legislation, ordinance, resolution, or a
public-private partnership to receive specific revenue to address
local housing needs.
(2) Receipt of ongoing revenues from dedicated sources of funding
such as taxes, fees, loan repayments, or private contributions.
(c) The minimum allocation to an applicant that is a newly
established trust shall be five hundred thousand dollars ($500,000).
The minimum allocation for all other trusts shall be one million
dollars ($1,000,000). No applicant may receive an allocation in
excess of one two million dollars
($1,000,000) ($2,000,000) per NOFA
, and no existing trust for which the matching funds come from a new
revenue source identified or created on or after June 30, 1012, may
receive an allocation in excess of one million dollars ($1,000,000)
per NOFA . All funds provided pursuant to this section shall be
matched on a dollar-for-dollar basis with moneys that are not
required by any state or federal law to be spent on housing. No
application for an existing housing trust shall be considered unless
the department has received adequate documentation of the deposit in
the local housing trust fund of the local match and the identity of
the source of matching funds. An application for a new trust shall
not be considered unless the department has received adequate
documentation, as determined by the department, that an ordinance
imposing or dedicating a tax or fee to be deposited into the new
trust has been enacted or the applicant has adopted a legally binding
commitment to deposit matching funds into the new trust. Funds shall
not be disbursed by the department to any trust until all matching
funds are on deposit and then funds may be disbursed only in amounts
necessary to fund projects identified to receive a loan from the
trust within a reasonable period of time, as determined by the
department. Applicants shall be required to continue funding the
local housing trust fund from these identified local sources, and
continue the trust in operation, for a period of no less than five
years from the date of award. If the funding is not continued for a
five-year period, then (1) the amount of the department's grant to
the local housing trust fund, to the extent that the trust fund has
unencumbered funds available, shall be immediately repaid, and (2)
any payments from any projects funded by the local housing trust fund
that would have been paid to the local housing trust fund shall be
paid instead to the department and used for the program or its
successor. The total amount paid to the department pursuant to (1)
and (2), combined, shall not exceed the amount of the department's
grant.
(d) (1) Funds shall be used for the predevelopment costs,
acquisition, construction, or rehabilitation of the following types
of housing or projects:
(A) Rental housing projects or units within rental housing
projects. The affordability of all assisted units shall be restricted
for not less than 55 years.
(B) Emergency shelters, safe havens, and transitional housing, as
these terms are defined in Section 50801.
(C) For-sale housing projects or units within for-sale housing
projects.
(2) At least 30 percent of the total amount of the grant and the
match shall be expended on projects, units, or shelters that are
affordable to, and restricted for, extremely low income households,
as defined in Section 50106. No more than 20 percent of the total
amount of the grant and the match shall be expended on projects or
units affordable to, and restricted for, moderate-income persons and
families whose income does not exceed 120 percent of the area median
income. The remaining funds shall be used for projects, units, or
shelters that are affordable to, and restricted for, lower income
households, as defined in Section 50079.5.
(3) If funds are used for the acquisition, construction, or
rehabilitation of for-sale housing projects or units within for-sale
housing projects, the grantee shall record a deed restriction against
the property that will ensure compliance with one of the following
requirements upon resale of the for-sale housing units, unless it is
in conflict with the requirements of another public funding source or
law:
(A) If the property is sold within 30 years from the date that
trust funds are used to acquire, construct, or rehabilitate the
property, the owner or subsequent owner shall sell the home at an
affordable housing cost, as defined in Section 50052.5, to a
household that meets the relevant income qualifications.
(B) The owner and grantee shall share the equity in the unit
pursuant to an equity-sharing agreement. The grantee shall reuse the
proceeds of the equity-sharing agreement consistent with this
section. To the extent not in conflict with another public funding
source or law, all of the following shall apply to the equity-sharing
agreement provided for by the deed restriction:
(i) Upon resale by an owner-occupant of the home, the
owner-occupant of the home shall retain the market value of any
improvements, the downpayment, and his or her proportionate share of
appreciation. The grantee shall recapture any initial subsidy and its
proportionate share of appreciation, which shall then be used to
make housing available to persons and families of the same income
category as the original grant and for any type of housing or shelter
specified in paragraph (1).
(ii) For purposes of this subdivision, the initial subsidy shall
be equal to the fair market value of the home at the time of initial
sale to the owner-occupant minus the initial sale price to the
owner-occupant, plus the amount of any downpayment assistance or
mortgage assistance. If upon resale by the owner-occupant the market
value is lower than the initial market value, then the value at the
time of the resale shall be used as the initial market value.
(iii) For purposes of this subdivision, the grantee's
proportionate share of appreciation shall be equal to the ratio of
the initial subsidy to the fair market value of the home at the time
of the initial sale.
(4) Notwithstanding subparagraph (A) of paragraph (1) or paragraph
(3), a local housing trust fund shall not be required to record a
separate deed restriction or equity agreement for any project or home
that it finances, if a restriction or agreement that meets the
requirements of subparagraph (A) of paragraph (1) or paragraph (3),
as applicable, has been, or will be, recorded against the property by
another public agency.
(e) Loan repayments shall accrue to the grantee housing trust for
use pursuant to this section. If the trust no longer exists, loan
repayments shall accrue to the department for use in the program or
its successor.
(f) (1) In order for a city, county, or city and county to be
eligible for funding, the applicant shall, at the time of
application, meet both of the following requirements:
(A) Have an adopted housing element that the department has
determined, pursuant to Section 65585 of the Government Code, is in
substantial 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.
(B) Have submitted to the department the annual progress report
required by Section 65400 of the Government Code within the preceding
12 months, if the department has adopted the forms and definitions
pursuant to subparagraph (B) of paragraph (2) of subdivision (a) of
Section 65400 of the Government Code.
(2) In order for a nonprofit organization applicant to be eligible
for funding, the applicant shall agree to utilize funds provided
under this chapter only for projects located in cities, counties, or
a city and county that meet both of the following requirements:
(A) Have an adopted housing element that the department has
determined, pursuant to Section 65585 of the Government Code, to be
in substantial 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.
(B) Have submitted to the department the annual progress report
required by Section 65400 of the Government Code within the preceding
12 months, if the department has adopted the forms and definitions
pursuant to subparagraph (B) of paragraph (2) of subdivision (a) of
Section 65400 of the Government Code.
(3) A city, county, or city and county that has received an award
pursuant to this section shall not encumber any program funds unless
it has an adopted housing element the department has determined,
pursuant to Section 65585 of the Government Code, is in substantial
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.
(g) Recipients shall have held, or shall agree to hold, a public
hearing or hearings to discuss and describe the project or projects
that will be financed with funds provided pursuant to this section.
As a condition of receiving a grant pursuant to this section, any
nonprofit organization shall agree that it will hold one public
meeting a year to discuss the criteria that will be used to select
projects to be funded. That meeting shall be open to the public, and
public notice of this meeting shall be provided, except to the extent
that any similar meeting of a city or county would be permitted to
be held in closed session.
(h) No more than 5 percent of the funds appropriated to the
department for the purposes of this program shall be used to pay the
costs of administration of this section.
(i) A local housing trust fund shall encumber funds provided
pursuant to this section no later than 36 months after receipt. In
addition, any award to a local housing trust that was under contract
on January 1, 2013, shall be extended by 12 months, subject to
progress benchmarks to be established by the department. Any funds
not encumbered within that period shall revert to the department for
use in the program or its successor.
(j) Recipients shall be required to file periodic reports with the
department regarding the use of funds provided pursuant to this
section. No later than December 31 of each year in which funds are
awarded by the program, the department shall provide a report to the
Legislature regarding the number of trust funds created, a
description of the projects supported, the number of units assisted,
and the amount of matching funds received.
SEC. 2. Section 53545.9 of the Health and Safety Code is amended
to read:
53545.9. Of the one hundred million dollars ($100,000,000)
transferred to the Affordable Housing Innovation Fund established in
the State Treasury under subparagraph (F) of paragraph (1) of
subdivision (a) of Section 53545, the following amounts shall be
allocated as follows:
(a) The department shall make available the amount of twenty-five
million dollars ($25,000,000) for the Affordable Housing Revolving
Development and Acquisition Program established pursuant to Section
50705.
(b) (1) The department shall make available the amount of
thirty-five million dollars ($35,000,000) for the local housing trust
fund matching grant program established under Section 50843.5. The
department shall make available 50 percent of this amount exclusively
for newly established housing trust funds.
(2) Notwithstanding any other law, funds set aside for housing
trust funds pursuant to this subdivision shall be continuously
available for encumbrance and disbursement to those trust funds, and
shall not revert to the Self-Help Housing Fund created by Section
50697.1, or any other fund.
(c) The department shall make available the amount of ten million
dollars ($10,000,000) for the Innovative Homeownership Program, which
the department shall develop and implement as follows:
(1) The program shall be designed to increase or maintain
affordable homeownership opportunities for Californians with lower
incomes.
(2) The department shall adopt guidelines for the program that,
among other things, shall maximize the number of units assisted,
limit the expenditure of funds for administrative costs, and maximize
the leverage of public and private financing sources.
(3) The guidelines adopted by the department shall provide for the
issuance of a notice of funding availability soliciting competitive
proposals for the use of funds consistent with those guidelines and
with subparagraph (F) of paragraph (1) of subdivision (a) of Section
53545.
(4) The guidelines adopted by the department shall not be subject
to the requirements of Chapter 6.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code.
(5) The department shall include within the annual report required
under Section 50408 a detailed summary and description of the manner
in which funds made available under this subdivision were expended
during the previous year and a statement regarding the manner in
which those expenditures meet the intent of the Legislature and the
voters that funds from the Innovative Housing Fund be expended in
support of innovative, cost-saving approaches to creating or
preserving affordable housing.
(d) (1) The amount of thirty million dollars ($30,000,000) is
transferred from the Affordable Housing Innovation Fund to a
subaccount, which is hereby created, within the Housing
Rehabilitation Loan Fund. Notwithstanding Section 13340 of the
Government Code, the moneys transferred to the subaccount shall be
continuously appropriated to the department for the Multifamily
Housing Program authorized by Chapter 6.7 (commencing with Section
50675) of Part 2 of Division 31.
(2) The department shall provide for the issuance of a notice of
funding availability soliciting competitive proposals for the use of
the funds appropriated in paragraph (1). The notice of funding
availability shall provide that the department will consider persons
with developmental disabilities, including, but not limited to, those
with autism, and homeless veterans as special needs populations for
purposes of granting bonus points to developments serving special
needs populations.
SEC. 3. 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 prevent the expiration of funding needed to implement
the Local Housing Trust Fund Matching Grant Program, it is necessary
for this act to take effect immediately.