BILL ANALYSIS                                                                                                                                                                                                    Ó

                                                                     AB 325

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          Date of Hearing:  May 13, 2015


                                 Jimmy Gomez, Chair

          325 (Wood) - As Amended April 16, 2015

          |Policy       |Housing and Community          |Vote:|6 - 0        |
          |Committee:   |Development                    |     |             |
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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          This bill makes specified changes to the Community Development  
          Block Grant (CDBG) Program application process. Specifically,  
          this bill:  


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          1)Provides that, no later than 60 days after the Department of  
            Housing and Community Development (HCD) notifies an applicant  
            that their CDBG application has been approved, HCD must enter  
            into a grant agreement with the applicant.

          2)Requires HCD, when it enters into a grant agreement with an  
            applicant, to provide the applicant with a complete and final  
            list of all of the activities the applicant must complete in  
            order to receive a disbursement of funds pursuant to the  

          3)Requires HCD to do either of the following, no later than 30  
            days after it receives a request for the disbursement of funds  
            from a grantee:

               a)     Notify the grantee that HCD has approved  
                 disbursement of the funds.

               b)     Provide the applicant with a complete and final list  
                 of all of the remaining activities the applicant must  
                 complete in order for HCD to approve disbursement of the  

          FISCAL EFFECT:

          On-going costs to HCD of up to $176,000 (GF) for up to one  
          position to provide additional information to grant applicants.  


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          HCD administers approximately 200 CDGB contracts each year. Each  
          contract can have eight or more activities, and each activity  
          can have several individual disbursements.


          1)Purpose. The author contends that certain CDBG grantees are  
            facing obstacles when applying for fund disbursements with  
            HCD, leading to confusion about what steps need to be taken in  
            order for the application to be acceptable. According to the  
            author, "the small cities and counties that stand to gain the  
            most from this program do not have the expertise or the  
            resources to navigate this unnecessarily complicated and drawn  
            out process.  In order to make the program more accessible to  
            some of our most underserved constituencies, we need to  
            approve these efficiencies."

          2)Background. The CDBG program was established by the United  
            States Housing & Community Development Act of 1974 (HCD Act)  
            and is administered at the federal level by the U.S.  
            Department of Housing and Urban Development (HUD).  The  
            primary federal objective of the CDBG program is to develop  
            viable urban communities by providing decent housing and a  
            suitable living environment and by expanding economic  
            opportunities, principally for persons of low and  

            Since 1983, HCD has administered the state CDBG program in  
            California.  Under the state CDBG Program, the state award  
            grants to smaller cities and counties to develop and preserve  
            decent affordable housing, to provide services to the most  
            vulnerable in our communities, and to create and retain jobs.  
            Annually, each state develops funding priorities and criteria  
            for selecting projects.  Eligible applicants include counties  
            with fewer than 200,000 residents in unincorporated areas and  


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            cities with fewer than 50,000 residents that do not  
            participate in the HUD CDBG entitlement program.  These are  
            known as "non-entitlement" areas.

            Each year, generally in January, HCD releases one combined  
            Notice of Funding Availability (NOFA) encompassing all  
            CDBG-eligible activities, including Community Development,  
            Economic Development, and the Native American and Colonia  
            Set-Asides.  The most recent NOFA was issued in January 2015,  
            and announced the availability of almost $25 million in  
            state-administered federal CDBG funds.

          3)Prior Legislation.

             a)   AB 232 (V. Manuel Pérez), Chapter 386, Statutes of 2012,  
               regarding the economic development portion of the CDBG  
               Program, eliminated the dollar-per-job test and the  
               requirement that benefit to low- and moderate-income  
               persons be a scoring factor in ranking applications.  
             b)   AB 2188 (Arambula), Chapter 95, Statutes of 2008,  
               deleted the sunset on provisions allowing HCD to annually  
               establish the maximum grant amounts under the General  
               Program and Economic Development Allocations of the CDBG  
               program and to determine the amount of funding that will be  
               set aside for technical assistance and planning grants.

          Analysis Prepared by:Jennifer Swenson / APPR. / (916)  


                                                                     AB 325

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