Amended in Assembly August 8, 2013

Amended in Senate May 20, 2013

Amended in Senate May 7, 2013

Amended in Senate April 2, 2013

Senate Bill No. 391

Introduced by Senator DeSaulnier

(Principal coauthors: Assembly Members Atkins, Bocanegra, and Gordon)

(Coauthors: Senators Block, Correa, begin insert De end insert begin insert  León, Evans, end insert Hancock, Hill, Leno, Lieu, begin insert Liu, end insert Pavley, Price, and Roth)

(Coauthors: Assembly Members begin insert Alejo, end insert Ammiano, Bloom, Bonilla, begin insert Chau, end insert Garcia, begin insert Gonzalez, Roger Hernández, Lowenthal, end insert Mullin, Quirk-Silva, begin insert Skinner, Stone, end insert Torres, and Wieckowski)

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, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.

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.

Existing law requires the Department of Industrial Relations to monitor and enforce compliance with applicable prevailing wage requirements for specified public works projects that are funded by state bond proceeds. Moneys collected for this purpose are continuously appropriated to the department from the State Public Works Enforcement Fund to cover the costs of these monitoring and enforcement duties.

This bill would require the Department of Industrial Relations to monitor and enforce prevailing wage requirements for construction contracts for certain public works projects over $1,000,000, that are funded, in whole or in part, by the bill. The bill would authorize the department to charge each person or entity awarding a construction contract for the reasonable and directly related costs of the monitoring and enforcement activities, and would require the department to deposit the moneys collected into the State Public Works Enforcement Fund. The bill would exempt projects with a collective bargaining agreement with a mechanism for resolution of wage disputes from this requirement.

By establishing a new source of revenue for a continuously appropriated fund, this bill would make an appropriation.

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.

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: 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.

begin insert

(h) Seven of the top 10 hardest hit cities by the foreclosure crisis
in the nation were in California. They include Stockton, Modesto,
Vallejo, Riverside-San Bernardino, Merced, Bakersfield, and
Sacramento.

end insert begin delete

(h)

end delete

begin insert (i) end insert  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.

begin delete

(i)

end delete

begin insert (j) end insert  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.

begin delete

(j)

end delete

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

begin delete

(k)

end delete

begin insert (l) end insert  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.

begin delete

(l)

end delete

begin insert (m) end insert  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.

begin delete

(m)

end delete

begin insert (n) end insert  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) Commencing January 1, 2014, and 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, paper, or notice” means a document relating to real
property, including, but not limited to, the following: 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 begin delete 50471 end delete begin insert 50470 end insert
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

 

begin delete

50470.  

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

end delete

begin delete 50471. end delete
begin insert 50470. end insert   

(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, begin delete emergency shelters; end delete
transitional and permanent rental housing, including necessary
service and operating subsidies; begin delete foreclosure mitigation; and end delete
homeownership opportunities begin insert ; emergency shelters and rapid
rehousing services; accessibility modifications; end insert begin insert and efforts to
acquire and rehabilitate foreclosed, vacant, or blighted homes end insert .

(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.

begin insert

begin insert 50471. end insert   

(a) The department, in consultation with the California
Housing Finance Agency, the California Tax Credit Allocation
Committee, and the California Debt Limit Allocation Committee,
shall develop and submit to the Legislature, at the time of the
Department of Finance’s adjustments to the proposed 2014-15
fiscal year budget pursuant to subdivision (e) of Section 13308 of
the Government Code, the California Homes and Jobs Trust Fund
Investment Strategy. Notwithstanding Section 10231.5 of the
Government Code, commencing with the 2019-20 fiscal year, and
every five years thereafter, concurrent with the release of the
Governor’s proposed budget, the department shall update the
investment strategy and submit it to the Legislature. The investment
strategy shall do all of the following:

(1) Identify the statewide needs, goals, objectives, and outcomes
for housing for a five-year time period.

(2) Promote a geographically balanced distribution of funds
including consideration of a direct allocation of funds to local
governments.

(3) Emphasize investments that serve households that are at or
below 60 percent of area median income.

(4) Meet the following minimum objectives:

(A) Encourage economic development and job creation by
helping to meet the housing needs of a growing workforce up to
120 percent of area median income.

(B) Identify opportunities for coordination among state
departments and agencies to achieve greater efficiencies, increase
the amount of federal investment in production, services, and
operating costs of housing, and promote energy efficiency in
housing produced.

(C) Incentivize the use and coordination of nontraditional
funding sources including philanthropic funds, local realignment
funds, nonhousing tax increment, federal Patient Protection and
Affordable Care Act, and other resources.

(D) Incentivize innovative approaches that produce cost savings
to local and state services by reducing the instability of housing
for frequent, high-cost users of hospitals, jails, detoxification
facilities, psychiatric hospitals, and emergency shelters.

(E) Incentivize regional partnerships that serve people that have
a high level of housing instability.

(b) Before submitting the investment strategy to the Legislature,
the department shall hold at least four public workshops in different
regions of the state to inform the development of the strategy.

(c) Expenditure requests contained in the Governor’s proposed
budget shall be consistent with the investment strategy developed
and submitted pursuant to this part. Moneys in the California
Homes and Jobs Trust Fund shall be appropriated through the
annual Budget Act.

(d) The strategy and updates required by this section shall be
submitted pursuant to Section 9795 of the Government Code.

end insert

begin delete 50472. end delete
begin insert 50473. end insert   

(a) This section applies to all construction projects in
excess of one million dollars ($1,000,000) that are funded, in whole
or in part, from the California Homes and Jobs Trust Fund, and
that are public works within the meaning of Section 1720 of the
Labor Code.

(b) (1) The Department of Industrial Relations shall monitor
and enforce compliance with applicable prevailing wage
requirements for any construction contract on a project subject to
this section and shall charge each person or entity awarding a
construction contract for the reasonable and directly related costs
of monitoring and enforcing compliance with the prevailing wage
requirements. The department, with the approval of the Director
of Finance, shall determine the rate or rates, which the department
may from time to time amend, that the department shall charge to
recover the reasonable and directly related costs of performing the
monitoring and enforcement services for public works projects.
However, the amount charged by the department shall not exceed
one-fourth of 1 percent of the amount of the contract.

(2) All moneys received by the department pursuant to this
section shall be deposited into the State Public Works Enforcement
Fund created by Section 1771.3 of the Labor Code.

(3) Paragraph (1) shall not apply to a project if a collective
bargaining agreement binds all of the contractors performing work
on the project, and that collective bargaining agreement includes
a mechanism for resolving disputes regarding the payment of
wages.

 

Article 2.  Audits and Reporting

 

50475.  

The California State Auditor’s Office 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, including efforts to promote a geographically
balanced distribution of funds. begin insert end insert begin insert The report shall also assess the
impact of the investment on job creation and the economy. With
respect to any awards made specifically to house or support
persons who are homeless or at-risk of homelessness, the report
shall include an analysis of the effectiveness of the funding in
allowing these households to retain permanent housing. 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.

SEC. 6.  

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 provide affordable housing opportunities at the earliest
possible time, it is necessary for this act to take effect immediately.