Amended in Senate September 4, 2013

Amended in Assembly May 2, 2013

Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1109

Introduced by Assembly Member Bonilla

(Coauthors: Assembly Members Atkins and Brown)

February 22, 2013

An act to amend Section 50802 of the Health and Safety Code, relating to housing, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 1109, as amended, Bonilla. Emergency housing and assistance.

Existing law requires the Department of Housing and Community Development to administer the Emergency Housing and Assistance Program. Under the program, moneys from the continuously appropriated Emergency Housing and Assistance Fund are available for the purposes of providing shelter, as specified, to homeless persons at as low a cost and as quickly as possible, without compromising the health and safety of shelter occupants, to encourage the move of homeless persons from shelters to a self-supporting environment as soon as possible, to encourage provision of services for as many persons at risk of homelessness as possible, to encourage compatible and effective funding of homeless services, and to encourage coordination among public agencies that fund or provide services to homeless individuals, as well as agencies that discharge people from their institutions.

Existing law requires the department to distribute funds appropriated for activities providing for capital development programs, including acquisition, leasing, construction, and rehabilitation of sites for emergency shelter and transitional housing for homeless persons, as grants in the form of forgivable deferred loans, as prescribed. Existing law requires the department to terminate the grant and require the repayment of the deferred loan in full, if a transfer or conveyance of the project property that results in the property no longer being used as an emergency shelter or transitional housing occurs before the term of the loan expires.

This bill would provide that when property is transitioned from an emergency shelter or transitional housing to permanent begin delete affordable housing, as specified, end delete begin insert supportive housing end insert and serves people who are homeless or at risk of homelessness, an existing loan may be deferred and forgiven, as if the property had remained an emergency shelter or transitional housing. begin insert Prior to a transition, the bill would require a project to obtain department approval to transition and would require the department to consider specified factors in determining whether to approve a transition. The bill would require a project transitioned to permanent supportive housing to have a loan term of 20 years. The bill would require the department to terminate the loan and would require repayment of the deferred loan in full if the project property is no longer used as permanent supportive housing for people who are homeless or at risk of homelessness. end insert By authorizing the use of continuously appropriated funds for a new purpose, this bill would make an appropriation.

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 50802 of the Health and Safety Code is
amended to read:

50802.  

(a) The department shall ensure that not less than 20
percent of the moneys in the Emergency Housing and Assistance
Fund shall be allocated to nonurban counties during any given
fiscal year. If the funds designated for facilities operation that are
allocated to nonurban counties are not awarded by the end of that
fiscal year, then those unencumbered funds shall be allocated in
the next fiscal year to urban counties. Funds for capital
development that are not awarded by the end of the second fiscal
year shall be awarded in the subsequent fiscal year to urban
counties.

(b) The amount of funds that the department allocates from the
Emergency Housing and Assistance Fund to each region, excluding
funds allocated pursuant to subdivision (a), shall be based upon a
formula that accords at least 20 percent weight to each of the
following factors:

(1) The relative number of persons in the region below the
poverty line according to the most recent federal census, updated,
if possible, with an estimate by the Department of Finance,
compared to the total of the urban counties.

(2) The relative number of persons unemployed within each
region, based on the most recent one-year period for which data
is available, compared to the total of the urban counties.

(c) Grant funds shall be disbursed as expeditiously as possible
by the department.

(d) The department shall use not more than 5 percent of the
amount available for funds pursuant to this chapter to defray the
department’s administrative costs pursuant to this chapter.

(e) Notwithstanding any other provision of this chapter, the
department shall distribute funds appropriated for purposes of the
activities specified in paragraph (2) of subdivision (a) of Section
50803 as grants in the form of forgivable deferred loans, subject
to all of the following:

(1) (A) Funding shall be made available to each project as a
loan with a term of five years for rehabilitation, seven years for
substantial rehabilitation, or 10 years for acquisition and
rehabilitation or new construction. Each deferred loan shall be
secured by a deed of trust and promissory note. Repayment of the
loan shall be deferred as long as the project is used as an emergency
shelter or transitional housing. At the completion of the specified
year term, the loan shall be forgiven. If a transfer or conveyance
of the project property, however, occurs prior to that time that
results in the property no longer being used as an emergency shelter
or transitional housing, the department shall terminate the grant
and require the repayment of the deferred loan in full.

(B) If the property is transitioned from an emergency shelter or
transitional housing to begin delete permanent affordable housing, including,
but not limited to, end delete permanent supportive housing, and serves people
who are homeless or at risk of homelessness, the loan may also be
deferred and forgiven according to subparagraph (A), as if it had
remained an emergency shelter or transitional housing. begin insert Prior to a
transition, a project shall obtain department approval to transition
to permanent supportive housing to ensure that the proposed
transition is consistent with this subdivision. In considering
whether to approve a transition, the department shall evaluate the
following factors: the compatibility of the permanent supportive
housing with the surrounding land uses, the suitability of the
building for use as permanent supportive housing, and project
financial feasibility. A project transitioned to permanent supportive
housing pursuant to this subdivision shall have a loan term of 20
years from the beginning of its approved use as permanent
supportive housing for people who are homeless or at risk of
homelessness. If a transitioned project property is no longer being
used as permanent supportive housing for people who are homeless
or at risk of homelessness, the department shall terminate the loan
and require repayment of the deferred loan in full. end insert

(i) For purposes of this subparagraph, “permanent supportive
housing” has the same meaning as the term “supportive housing,”
as defined in paragraph (2) of subdivision (b) of Section 50675.14.

(ii) For purposes of this subparagraph, “people who are
homeless” begin delete includes end delete begin insert means end insert individuals described in Section 11302
of Title 42 of the United States Code, and paragraph (2) of
subdivision (e) of Section 11139.3 of the Government Code.

(2) Applications for funding shall be made pursuant to
department-issued statewide “Notices of Funding Availability”
without the need for additional regulations.

(3) The department shall set forth the criteria for evaluating
applications in the “Notices of Funding Availability” and shall
make deferred loans based on those applications that best meet the
criteria.

(4) The department shall specify in the “Notice of Funding
Availability” both maximum and minimum grant amounts that
may be varied for urban and nonurban counties.

(5) Contracts for projects that have not begun construction
within the initial 12-month period shall be terminated and funds
reallocated. The department, however, may extend this period by
a period not to exceed 12 months.