BILL ANALYSIS                                                                                                                                                                                                    Ó


          |SENATE RULES COMMITTEE            |                        SB 391|
          |Office of Senate Floor Analyses   |                              |
          |1020 N Street, Suite 524          |                              |
          |(916) 651-1520         Fax: (916) |                              |
          |327-4478                          |                              |
                                    THIRD READING

          Bill No:  SB 391
          Author:   DeSaulnier (D), et al.
          Amended:  5/20/13
          Vote:     27 - Urgency

          AYES:  DeSaulnier, Beall, Hueso, Lara, Liu, Pavley
          NOES:  Gaines, Galgiani, Wyland
          NO VOTE RECORDED:  Cannella, Roth

           SENATE GOVERNANCE & FINANCE COMMITTEE  :  5-2, 4/24/13
          AYES:  Wolk, Beall, DeSaulnier, Hernandez, Liu
          NOES:  Knight, Emmerson

           SENATE APPROPRIATIONS COMMITTEE  :  5-2, 5/23/13
          AYES:  De León, Hill, Lara, Padilla, Steinberg
          NOES:  Walters, Gaines

           SUBJECT  :    California Homes and Jobs Act of 2013

           SOURCE  :     California Housing Consortium
                      Housing California

           DIGEST  :    This bill imposes, beginning January 1, 2014, a fee  
          of $75 on the recording of each real estate-related document,  
          except for those documents recorded in connection with a  
          transfer subject to a documentary transfer tax, and directs the  
          money to the California Homes and Jobs Trust Fund (Trust Fund).   
          The Legislature may then appropriate these funds for the  
          development, acquisition, rehabilitation, and preservation of  


                                                                    SB 391

          homes affordable to low- and moderate-income households,  
          including emergency shelters, transitional and permanent rental  
          housing, foreclosure mitigation, and homeownership  

           ANALYSIS  :    Existing law establishes a number of programs at  
          the Department of Housing and Community Development (HCD) and  
          the California Housing Finance Agency to make housing more  
          affordable to California families and individuals, including the  
          following main programs:

             Multifamily Housing Program, which funds the new  
             construction, rehabilitation, and preservation of permanent  
             and transitional rental homes for lower income households  
             through loans to local governments, non-profit developers,  
             and for-profit developers.

             Joe Serna, Jr., Farmworker Housing Program, which funds the  
             development of ownership or rental homes for agricultural  
             workers through grants to local governments and non-profit  

             Emergency Housing Assistance Program, which funds emergency  
             shelters and transitional homes for homeless individuals and  
             families through grants to counties and non-profit entities  
             for rehabilitation, renovation, expansion, site acquisition,  
             and equipment.

             CalHome Program, which funds downpayment assistance, home  
             rehabilitation, counseling, self-help mortgage assistance  
             programs, and technical assistance for self-help and shared  
             housing through grants and loans.

             California Homebuyer Downpayment Assistance Program, which  
             aids first-time homebuyers with down payment and/or closing  

          Historically, the State has funded these programs through the  
          sale of general obligations bonds.  Most recently, the voters  
          approved a $2.1 billion bond through Proposition 46 in 2002 and  
          then a $2.85 billion bond through Proposition 1C in 2006.  These  
          funds financed the construction, rehabilitation, and  
          preservation of 57,220 affordable apartments, including 2,500  
          supportive homes for people experiencing homelessness, and over  



                                                                     SB 391

          11,600 shelter spaces.  In addition, these funds have helped  
          57,290 families become or remain homeowners.  HCD has awarded  
          almost all of the funds made available under these propositions,  
          particularly in these main programs.  

          Until 2011, the Community Redevelopment Law required  
          redevelopment agencies to set aside 20% of all tax increment  
          revenue to increase, improve, and preserve the community's  
          supply of low- and moderate-income housing available at an  
          affordable housing cost.  In fiscal year 2009-10, redevelopment  
          agencies deposited $1.075 billion of property tax increment  
          revenues into their Low- and Moderate-Income Housing Funds.   
          With the elimination of redevelopment agencies, this source of  
          funding for affordable housing is no longer available.

          This bill:

          1. Enacts the California Homes and Jobs Act of 2013 (Act) which  
             imposes a fee, beginning January 1, 2014, of $75 on the  
             recording of each real estate instrument, paper, or notice,  
             except for those documents recorded in connection with a  
             transfer subject to a documentary transfer tax, and directs  
             the money to the Trust Fund.  

          2. Allows the funds to be appropriated for the development,  
             acquisition, rehabilitation, and preservation of homes  
             affordable to low- and moderate-income households, including  
             emergency shelters, transitional and permanent rental  
             housing, foreclosure mitigation, and homeownership  

          3. Limits administrative costs to 5% of the funds for  
             administering housing programs that receive an appropriation  
             from the Trust Fund.  

          4. Requires HCD to report annually to the Legislature on how  
             funds made available and allocated under this Act, including  
             efforts to promote a geographically balanced distribution of  
             the funds.

          5. Requires the Department of Industrial Relations to monitor  
             and enforce prevailing wage requirements for construction  
             contracts for public works projects over $1,000,000, that are  
             funded, in whole or in part, by this bill.  



                                                                     SB 391

          6. Requires the Bureau of State Audits (BSA) to conduct periodic  
             audits to ensure that state agencies award appropriated funds  
             in a timely fashion consistent with legal requirements.   
             Requires the first audit be conducted within two years of the  
             effective date of the Act.

           Types of documents covered  .  This bill applies the $75 fee to  
          the recording of all real estate instrument, paper, or notice  
          except those recorded in connection with a transfer subject to  
          the imposition of a documentary transfer tax and those expressly  
          exempted from payment of recording fees.  There are many types  
          of documents that fall under the proposed fee, including, but  
          not limited to: 

             Deeds and grant deeds
             Trustees' deeds and deeds of trust
             Amendments of deeds of trust
             Quit claim deeds
             Fictitious deeds of trust
             Assignments of deeds of trust
             Construction trust deeds
             Lot line adjustments
             Covenants, conditions, and restrictions
             Abstracts of judgment
             Subordination agreements
             Declarations and abandonments of homestead
             Requests for notice of default
             Notices of default 
             Notices of trustee sale
             Substitution of trustee
             Trustee's deed upon sale
             Notices of completion
             Notice of rescission of declaration of default
             Releases or discharges
             Leases and assignments of leases
             Assignments of rents



                                                                     SB 391

             Uniform Commercial Code amendment, assignment, continuation,  
             statement,   or termination

           FISCAL EFFECT  :    Appropriation:  Yes   Fiscal Com.:  Yes    
          Local:  Yes

          According to the Senate Appropriations Committee:

             Unknown fee revenue gains ranging from $300 million to $720  
             million per year depending on the volume of recorded  
             documents (Trust Fund).

             Estimated annual administrative costs of approximately $5.4  
             million (Trust Fund) to fund up to 47 positions at the HCD.   
             All HCD administrative costs are fully covered by fees  

             Costs in the range of $250,000 to $350,000 (Trust Fund) in  
             2016-17 to the BSA to conduct an initial audit.  Ongoing  
             periodic audit costs in the range of $150,000 to $250,000  
             (Trust Fund).  All BSA audit costs are fully covered by fees  

             Unknown local mandate costs, not state-reimbursable.  This  
             bill authorizes the county recorder to deduct actual and  
             necessary costs to administer to collection of recordation  
             fees prior to transmitting the balance to the State.

           SUPPORT  :   (Verified  5/23/13)

          California Housing Consortium (co-source)
          Housing California (co-source)
           State Treasurer Bill Lockyer
           A Community of Friends
           Abode Communities
           Advent Companies
           Alameda County Developmental Disabilities Council
           Alpha Construction Company
           AMCAL Multi-Housing
           American Baptist Homes of the West
           American Planning Association, California Chapter
           Amity Foundation



                                                                     SB 391

           Amstutz Associates
           Angelus Plaza
           Ashwood Construction
           Asian Pacific Environmental Network
           Association of Regional Center Agencies
           Asthma Coalition of Los Angeles County
           Bay Area Business Roundtable
           Bay Area Community Land Trust
           Bay Area Council
           Bay Area Regional Health Inequities Initiative
           BRC Advisors
           BRIDGE Housing
           Burbank Housing Development Corporation
           Cabrillo Economic Development Corporation
           Cahill Contractors
           California Apartment Association
           California Association of Housing Authorities
           California Association of Local Housing Finance Agencies
           California Building Industry Association
           California Coalition for Rural Housing
           California Coalition for Youth
           California Conference of Carpenters
           California Council for Affordable Housing
           California Council of Community Mental Health Agencies
           California Disability Services Association
           California Housing Partnership Corporation
           California Labor Federation
           California Mental Health Directors Association
           California Mental Health Planning Council
           California Partnership to End Domestic Violence
           California Police Chiefs Association
           California Reinvestment Coalition
           California Rural Legal Assistance Foundation
           California School Employees Association
           Carson Chamber of Commerce
           Casa Major
           Central City Association
           Century Housing
           Century Villages at Cabrillo
           Cesar Chavez Foundation
           Cities of Berkeley, Burbank, Calexico, Del Mar, El Centro, El  
            Monte, Emeryville, Fairfield, Goleta, Jurupa Valley,  



                                                                     SB 391

            Livingston, Los Angeles, Lynwood, Oakland, Oxnard, Pasadena,  
            Sacramento, San Francisco, San Joaquin, San Jose, San Luis  
            Obispo, San Mateo, Santa Barbara, Santa Monica, Torrance,  
            Ventura, Vista, and West Hollywood
           Coachella Valley Housing Coalition
           Community Corporation of Santa Monica
           Community Health Improvement Partners
           Community Housing Improvement Program
           Community Housing Opportunities Corporation
           Community Housing Works
           Community Working Group
           Contra Costa Health Services
           Corporation for Supportive Housing
           Counties of Alameda, Contra Costa, and San Francisco
           Dignity Health
           DMB Pacific Ventures
           Domus Development
           Drug Policy Alliance
           Duncan Group
           EAH Housing
           East Bay Developmental Disabilities Legislative Coalition
           East Bay Housing Organizations
           East LA Community Corporation
           Ecumenical Council Pasadena Area Congregations
           Eden Housing
           Enterprise Community Partners
           Environmental Health Coalition
           Episcopal Community Services of San Francisco
           First Place for Youth
           Foundation for Affordable Housing
           Fullerton Chamber of Commerce
           Gonzalez Goodale Architects
           Habitat for Humanity California
           Habitat for Humanity East Bay/Silicon Valley
           Habitat for Humanity Greater San Francisco
           Habitat for Humanity Inland Valley
           Habitat for Humanity Pomona Valley
           Habitat for Humanity Riverside
           Habitat for Humanity San Gabriel Valley
           Habitat for Humanity San Luis Obispo County
           Habitat for Humanity Santa Cruz County
           Hamilton Family Center
           Highridge Costa Housing Partners



                                                                     SB 391

           Hollywood Community Housing Corporation
           Home Builders Association of Tulare/Kings Counties
           Home Start
           Homes for Life Foundation
           Housing Authority for the City of San Buenaventura
           Housing Choices Coalition for People with Developmental  
           Housing Leadership Council of San Mateo County
           Housing Works
           ICON Builders
           InnerCity Struggle
           Integrity Housing
           Interfaith Community Services
           International Association for Women of Color Day
           Jamboree Housing Corporation
           John Stewart Company
           Kennedy Commission
           L.A. Family Housing
           LA Voice
           LA Works
           Larkin Street Youth Services
           Laurin Associates
           Lauterbach and Associates
           Law Foundation of Silicon Valley
           Leading Age California
           League of California Cities
           League of Women Voters of California
           LeSar Development Consultants
           LINC Housing
           Little Tokyo Service Center
           Loaves and Fishes
           Local Initiatives Support Corporation
           Los Angeles Area Chamber of Commerce
           Los Angeles Business Council
           Los Angeles Business Leaders Task Force on Homelessness
           Los Angeles Community Action Network
           Los Angeles Regional Reentry Partnership
           Lutheran Office of Public Policy
           Mammoth Lakes Housing
           Marin Workforce Housing Trust
           Mental Health America of Los Angeles
           Mental Health Systems
           Mercy Housing



                                                                     SB 391

           MidPen Housing Corporation
           Move LA
           Multicultural Communities for Mobility
           Mutual Housing California
           Nancy Lewis Associates
           National Community Renaissance
           National Council of La Raza
           National Housing Law Project
           Natural Resources Defense Council
           Neighborhood Housing Services of Los Angeles County
           Neighborhood Partnership Housing Services
           NeighborWorks Orange County
           Nevada/California Indian Housing Association
           New Directions
           Non-Profit Housing Association of Northern California
           Northern California Community Loan Fund
           Northern Circle Indian Housing Authority
           Opportune Companies
           Orange County Business Council
           Orange County Housing Trust
           Pacific Clinics
           Palm Communities
           Partner Energy
           Pasadena Police Department
           Pasadena Public Health Department
           Peace Officers Research Association of California
           Peninsula Interfaith Action
           Penny Lane Centers
           People Assisting the Homeless
           Peoples' Self-Help Housing Corporation
           PICO California
           Public Advocates
           Related California
           Resources for Community Development
           Ruiz Brothers Construction Co.
           Rural Communities Housing Development Corporation
           Rural Community Assistance Corporation
           Sacramento Homeless Organizing Committee
           Sacramento Housing Alliance
           San Benito County Housing and Economic Development Department
           San Diego Community Land Trust
           San Diego Regional Chamber of Commerce



                                                                     SB 391

           San Gabriel Valley Consortium on Homelessness
           San Gabriel Valley Council of Governments
           San Luis Obispo County Housing Trust Fund
           Self-Help Enterprises
           Service Employees International Union (SEIU) California State  
           Sierra Business Council
           Sierra Club California
           Silicon Valley Bank
           Silicon Valley Leadership Group
           Skid Row Housing Trust
           Sonoma County Task Force for the Homeless
           Southeast Asian Community Alliance
           Southern California Association of Non-Profit Housing
           SRO Housing Corporation
           St. Joseph Center
           St. Joseph Health
           St. Paul's Senior Home and Services
           Stand Up for Neighborly Novato
           State Building and Construction Trades Council of California
           State Independent Living Council
           Step Up on Second
           Sun Country Builders
           Sunseri Construction
           Supervisor Mark Ridley-Thomas, Los Angeles County
           T.R.U.S.T. South LA
           TELACU Residential Management, Inc.
           Tenderloin Neighborhood Development Corporation
           Thai Community Development Center
           The Arc
           The KTGY Group
           Thomas Safran and Associates
           Turning Point Community Programs
           United Cerebral Palsy in California
           United Homeless Healthcare Partners
           United States Veterans Initiative
           United Way of Fresno County
           United Way of Greater Los Angeles
           United Ways of California
           Valley Economic Development Center
           Venice Community Housing Corporation
           Veterans of Foreign Wars of the U.S. Greater El Monte Post
           Visionary Home Builders



                                                                     SB 391

           Wakeland Housing and Development Corporation
           Walton Construction Services
           Ward Economic Development Corporation
           West Angeles Community Development Corporation
           Western Center on Law and Poverty
           Westport Construction
          Women Organizing Resources, Knowledge, and Services

           OPPOSITION  :    (Verified  5/23/13)

          Board of Equalization Member George Runner
          Board of Equalization Member Michelle Steel
          Butte County Clerk-Recorder
          Calaveras County Clerk-Recorder
          California Association of Legal Document Assistants
          California Association of Realtors
          California Credit Union League
          California Document Preparers
          California Escrow Association
          California Land Surveyors Association
          California Land Title Association
          California Taxpayers Association
          Cities of Camarillo, Cypress, and Waterford
          Colusa County Clerk Recorder
          Counties of Butte, Colusa, Lassen, Mono, Orange, San Luis  
          Obispo, and Sierra
          County Recorders' Association of California
          El Dorado County Recorder-Clerk
          Hamman Real Estate
          Inyo County Clerk Recorder
          Kern County Assessor-Recorder
          Marin County Assessor-Recorder-Clerk
          Nevada County Clerk-Recorder
          Orange County Clerk-Recorder
          Plumas County Clerk
          Riverside County Assessor-County Clerk-Recorder
          San Bernardino County Recorder-Clerk
          San Luis Obispo County Clerk-Recorder
          Santa Barbara County Clerk, Recorder and Assessor
          Sierra County Clerk-Recorder
          Sonoma County Clerk-Recorder-Assessor
          Stanislaus County Clerk-Recorder
          Western Mining Alliance
          Yolo County Clerk-Recorder



                                                                     SB 391

           ARGUMENTS IN SUPPORT  :    According to the author's office,  
          everyone in California needs a safe and affordable place to call  
          home.  For United States military veterans, former foster youth,  
          families with children, people with disabilities, seniors on  
          fixed incomes, and other vulnerable Californians, however, the  
          housing crisis is not over.  Millions of Californians are caught  
          in the "perfect storm" - mortgages remain out of reach, credit  
          standards have tightened, and the foreclosure crisis has pushed  
          more people into a rental market already suffering from decades  
          of short supply - leading to record-setting rent increases.  The  
          most vulnerable, who struggled to make rent before the  
          foreclosure crisis, face even more uncertainty in today's rental  
          housing market.  They risk joining the more than 130,000  
          Californians who are homeless on any given night.  

          Moreover, rents and mortgages within the reach of working  
          families are critical to maintaining California's business  
          competitiveness.  Numerous business groups say California needs  
          to increase the supply of housing options affordable to workers  
          so companies can compete for the talent that drives California's  

          At the same time, California's investment in affordable homes  
          has dried up.  State agencies have awarded nearly all of the  
          voter-approved bond funding for affordable housing.  Likewise,  
          the elimination of redevelopment agencies has cut off funding  
          from the low- and moderate-income housing set aside.  

          The Act begins to restore California's historic investments in  
          affordable homes by creating an ongoing, pay-as-you-go source of  
          funding dedicated to affordable housing development.

           ARGUMENTS IN OPPOSITION  :    The Orange County Board of  
          Supervisors states that the proposed fee has no relation to  
          affordable housing and places additional financial burdens on  
          ordinary Californians.  The County Recorders Association of  
          California and its members point out that some recordings or  
          transactions involve more than one document, in which case the  
          per-document fee will add to the already substantial cost of  
          recording.  In addition, county recorders will encounter  
          significant increases in staff time to collect fees and address  
          unsatisfied customers.  



                                                                     SB 391

          JA:k  5/23/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

                                   ****  END  ****