Amended in Senate April 2, 2013

Senate Bill No. 391

Introduced by Senator DeSaulnier

(Principal coauthors: Assembly Members begin delete Atkins and Bocanegra end delete begin insert Atkins, Bocanegra, and Gordon end insert )

(Coauthors: Senators Correa, begin insert Hancock, end insert Hill, Leno, Lieu, begin delete and Pavley end delete begin insert Pavley, and Roth end insert )

(Coauthors: Assembly Members Ammiano, Bloom, Bonilla, begin delete Gordon, end delete Mullin, Quirk-Silva, begin delete and Torres end delete begin insert Torres, and Wieckowski end insert )

February 20, 2013

An act to add Section 27388.1 to the Government Code, and to add Chapter 2.5 (commencing with Section 50470) to Part 2 of Division 31 of the Health and Safety Code, relating to housing.

LEGISLATIVE COUNSEL’S DIGEST

SB 391, as amended, DeSaulnier. California Homes and Jobs Act of 2013.

Under existing law, there are programs providing assistance for, among other things, emergency housing, multifamily housing, farmworker housing, home ownership for very low and low-income households, and downpayment assistance for first-time homebuyers. Existing law also authorizes the issuance of bonds in specified amounts pursuant to the State General Obligation Bond Law. Existing law requires that proceeds from the sale of these bonds be used to finance various existing housing programs, capital outlay related to infill development, brownfield cleanup that promotes infill development, and housing-related parks.

This bill would enact the California Homes and Jobs Act of 2013. The bill would make legislative findings and declarations relating to the need for establishing permanent, ongoing sources of funding dedicated to affordable housing development. The bill would impose a fee, except as provided, of $75 to be paid at the time of the recording of every real estate instrument, paper, or notice required or permitted by law to be recorded. By imposing new duties on counties with respect to the imposition of the recording fee, the bill would create a state-mandated local program. The bill would require that revenues from this fee be sent quarterly to the Department of Housing and Community Development for deposit in the California Homes and Jobs Trust Fund, which the bill would create within the State Treasury. The bill would provide that moneys in the fund may be expended for supporting affordable housing, administering housing programs, and the cost of periodic audits, as specified. The bill would impose certain auditing and reporting requirements.

This bill would result in a change in state taxes for the purpose of increasing state revenues within the meaning of Section 3 of Article XIII  A of the California Constitution, and thus would require for passage the approval of 2⁄3 of the membership of each house of the Legislature.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

This act shall be known as the California Homes
and Jobs Act of 2013.

SEC. 2.  

The Legislature finds and declares that having a healthy
housing market that provides an adequate supply of homes
affordable to Californians at all income levels is critical to the
economic prosperity and quality of life in the state. The Legislature
further finds and declares all of the following:

(a) Funding approved by the state’s voters in 2002 and 2006,
as of June 2011, has financed the construction, rehabilitation, and
preservation of over 11,600 shelter spaces and 57,220 affordable
apartments, including 2,500 supportive homes for people
experiencing homelessness. In addition, these funds have helped
57,290 families become or remain homeowners. Nearly all of the
voter-approved funding for affordable housing was awarded by
the beginning of 2012.

(b) The requirement in the Community Redevelopment Law
that redevelopment agencies set aside 20 percent of tax increment
for affordable housing generated roughly one billion dollars
($1,000,000,000) per year. With the elimination of redevelopment
agencies, this funding stream has disappeared.

(c) California has 12 percent of the United States population
but 21.4 percent of its homeless population. Seventy-three percent
of people experiencing homelessness in California fell into it
because they could not afford a place to live. Sixty-two percent of
homeless Californians are unsheltered, 14 percent are veterans,
and 20 percent are families.

(d) Furthermore, 4 of the top 10 metropolitan areas in the
country for homeless are in the following metropolitan areas in
California: San Jose-Sunnyvale-Santa Clara, Los Angeles-Long
Beach-Santa Ana, Fresno, and Stockton.

(e) California continues to have the second lowest
homeownership rate in the nation, and minimum wage earners
have to work 120 hours per week to afford the average
two-bedroom apartment.

(f) Millions of Californians are affected by the state’s chronic
housing shortage, including seniors, veterans, people experiencing
chronic homelessness, working families, people with mental,
physical, or developmental disabilities, agricultural workers, people
exiting jails, prisons, and other state institutions, survivors of
domestic violence, and former foster and transition-aged youth.

(g) While the current credit and foreclosure crisis has resulted
in reductions in home prices in some areas, it has increased pressure
on the rental housing market and slowed new housing production
of all types, exacerbating the mismatch between the ever increasing
number of households that need housing they can afford and the
supply.

(h) California’s workforce continues to experience longer
commute times as persons in the workforce seek affordable housing
outside the areas in which they work. If California is unable to
support the construction of affordable housing in these areas,
congestion problems will strain the state’s transportation system
and exacerbate greenhouse gas emissions.

(i) Many economists agree that the state’s higher than average
unemployment rate is due in large part to massive shrinkage in the
construction industry from 2005 to 2009, including losses of nearly
700,000 construction-related jobs, a 60-percent decline in
construction spending, and an 83-percent reduction in residential
permits. Restoration of a healthy construction sector will
significantly reduce the state’s unemployment rate.

(j) The lack of sufficient housing impedes economic growth
and development by making it difficult for California employers
to attract and retain employees.

(k) To keep pace with continuing demand, the state should
identify and establish a permanent, ongoing source or sources of
funding dedicated to affordable housing development. Without a
reliable source of funding for housing affordable to the state’s
workforce and most vulnerable residents, the state and its local
and private housing development partners will not be able to
continue increasing the supply of housing after existing housing
bond resources are depleted.

(l) The investment will leverage billions of dollars in private
investment, lessen demands on law enforcement and dwindling
health care resources as fewer people are forced to live on the
streets or in dangerous substandard buildings, and increase
businesses’ ability to attract and retain skilled workers.

(m) In order to promote housing and homeownership
opportunities, the recording fee imposed by this act should not be
applied to any recordings made in connection with a sale of real
property. Purchasing housing is likely the largest purchase made
by Californians, and it is the intent of this act not to increase
transaction costs associated with these transfers.

SEC. 3.  

Section 27388.1 is added to the Government Code, to
read:

27388.1.  

(a) (1) Except as provided in paragraph (2), in
addition to any other recording fees specified in this code, a fee
of seventy-five dollars ($75) shall be paid at the time of recording
of every real estate instrument, paper, or notice required or
permitted by law to be recorded except those expressly exempted
from payment of recording fees. “Real estate instrument” includes,
but is not limited to, the following documents: deed, grant deed,
trustee’s deed, deed of trust, reconveyance, quit claim deed,
fictitious deed of trust, assignment of deed of trust, request for
notice of default, abstract of judgment, subordination agreement,
declaration of homestead, abandonment of homestead, notice of
default, release or discharge, easement, notice of trustee sale, notice
of completion, UCC financing statement, mechanic’s lien, maps,
and covenants, conditions, and restrictions.

(2) The fee described in paragraph (1) shall not be imposed on
any real estate instrument, paper, or notice recorded in connection
with a transfer subject to the imposition of a documentary transfer
tax as defined in Section 11911 of the Revenue and Taxation Code.

(b) The fees, after deduction of any actual and necessary
administrative costs incurred by the county recorder in carrying
out this section, shall be sent quarterly to the Department of
Housing and Community Development for deposit in the California
Homes and Jobs Trust Fund established by Section 50471 of the
Health and Safety Code, to be expended for the purposes set forth
in that section. In addition, the county shall pay to the Department
of Housing and Community Development interest, at the legal
rate, on any funds not paid to the Controller within 30 days of the
end of a quarter.

SEC. 4.  

Chapter 2.5 (commencing with Section 50470) is added
to Part 2 of Division 31 of the Health and Safety Code, to read:

 

Chapter  2.5. California Homes and Jobs Trust Fund

 

Article 1.  General Provisions

 

50470.  

This chapter shall be known, and may be cited, as the
California Homes and Jobs Act of 2013.

50471.  

(a) There is hereby created in the State Treasury the
California Homes and Jobs Trust Fund. All interest or other
increments resulting from the investment of moneys in the fund
shall be deposited in the fund, notwithstanding Section 16305.7
of the Government Code. Moneys in the California Homes and
Jobs Trust Fund shall not be subject to transfer to any other fund
pursuant to any provision of Part 2 (commencing with Section
16300) of Division 4 of Title 2 of the Government Code, except
to the Surplus Money Investment Fund. Upon appropriation by
the Legislature, moneys in the fund may be expended for the
following purposes:

(1) Supporting the development, acquisition, rehabilitation, and
preservation of housing affordable to low- and moderate-income
households, including, but not limited to, emergency shelters;
transitional and permanent rental housing, including necessary
service and operating subsidies; foreclosure mitigation; and
homeownership opportunities.

(2) Administering housing programs that receive an
appropriation from the fund. Moneys expended for this purpose
shall not exceed 5 percent of the moneys in the fund.

(3) The cost of periodic audits required by Section 50475.

(b) Both of the following shall be paid and deposited in the
fund:

(1) Any moneys appropriated and made available by the
Legislature for purposes of the fund.

(2) Any other moneys that may be made available to the
department for the purposes of the fund from any other source or
sources.

 

Article 2.  Audits and Reporting

 

50475.  

The begin delete Bureau of State Audits end delete begin insert California State Auditor’s
Office end insert shall conduct periodic audits to ensure that the annual
allocation to individual programs is awarded by the department in
a timely fashion consistent with the requirements of this chapter.
The first audit shall be conducted no later than 24 months from
the effective date of this section.

50476.  

In its annual report to the Legislature pursuant to
Section 50408, the department shall report how funds that were
made available pursuant to this chapter and allocated in the prior
year were expended begin insert , including efforts to promote a geographically
balanced distribution of funds end insert . The department shall make the
report available to the public on its Internet Web site.

SEC. 5.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
a local agency or school district has the authority to levy service
charges, fees, or assessments sufficient to pay for the program or
level of service mandated by this act, within the meaning of Section
17556 of the Government Code.