BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 325|
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CONSENT
Bill No: AB 325
Author: Wood (D)
Amended: 7/1/15 in Senate
Vote: 21
SENATE TRANS. & HOUSING COMMITTEE: 11-0, 7/7/15
AYES: Beall, Cannella, Allen, Bates, Gaines, Galgiani, Leyva,
McGuire, Mendoza, Roth, Wieckowski
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 77-0, 6/2/15 - See last page for vote
SUBJECT: Community Development Block Grant Program
SOURCE: Author
DIGEST: This bill makes specified changes to the Community
Development Block Grant (CDBG) program application process.
ANALYSIS:
Existing law:
1)Provides that the Legislature intends funds to be allocated to
the state pursuant to the federal CDBG program, and
administered by the Department of Housing and Community
Development (HCD), to be of maximum benefit in meeting the
housing and economic needs of persons and families of low or
moderate income.
2)Requires HCD to administer the state CDBG program to eligible
cities and counties.
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3)Defines "non-entitlement area" as an area which is not a
metropolitan city or part of an urban county and does not
include Indian Tribes. "Urban county" generally means having
a population greater than 200,000 and "metropolitan city"
generally means having a population greater than 50,000.
4)Requires HCD to allocate not less than 51% of CDBG funds for
purposes of providing or improving housing opportunities for
low- or moderate-income households.
5)Requires HCD to allocate 30% of CDBG funds for purposes of
economic development.
This bill:
1)Requires HCD to provide a grant agreement to an applicant for
execution no later than 60 days after HCD notifies the
applicant that it was approved for funds. The 60 days' notice
requirement shall not apply if the federal government or the
Legislature makes significant changes to the CDBG program.
2)Requires HCD to provide the applicant with a complete and
final list of all the activities the applicant must complete
to receive a disbursement of funds pursuant to the agreement
at the time HCD enters the agreement with the applicant. HCD
may make appropriate and corresponding changes to the complete
and final list of activities if the applicant makes changes to
the original application or the federal government or
Legislature requires changes.
3)Requires HCD to do one of the following no later than 30 days
after it receives a request for 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 the remaining activities the applicant must complete
for disbursement of funds.
Background
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Background of the CDBG program. Existing law established the
CDBG program under the U.S. Housing and Community Development
Act (Act) of 1974 and it is administered at the federal level by
the U.S. Department of Housing and Urban Development (HUD). The
purpose of the CDBG Program is to provide communities with
resources to address a wide range of unique community
development needs, including affordable housing, services to the
most vulnerable, and job creation through the expansion and
retention of businesses, particularly for persons of low and
moderate income. "Persons of low and moderate income" are
defined as families, households, and individuals whose incomes
do not exceed 80% of the county median income, with adjustments
for family or household size. Among the many uses of CDBG funds
are infrastructure improvements and activities in support of the
construction of housing.
HUD allocates CDBG funds via formula to "entitlement
jurisdictions" (i.e., cities over 50,000 population and counties
over 200,000 population). In 1981, Congress amended the Act to
give each state the opportunity to administer federal CDBG funds
for smaller cities and counties, known as "non-entitlement
areas," which include cities with populations under 50,000 and
counties with populations under 200,000. Since 1983, HCD has
developed funding priorities and criteria for selecting projects
for the state CDBG program in California for non-entitlement
areas.
Each year, generally in January, the CDBG program 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 nearly $25 million in
state-administered federal CDBG funds.
Comments
Purpose of the bill. According to the author, HCD allocates
funds under the federal CDBG program to local municipalities.
The small cities and counties that stand to gain the most from
this program do not have the expertise or resources to navigate
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the complicated and drawn-out grant process. To make the
program more accessible, this bill seeks to establish a timeline
to improve stability and predictability for grant applicants.
State process following application. Federal and state laws
apply to the state CDBG program. Following the notification to
an applicant that the application was approved for funds, HCD
prepares a grant agreement between HCD and the applicant. The
grant agreement outlines, among other things, the activities for
the use of the awards, federal and state requirements, and an
expenditure timeline. HCD also sends a cover letter describing
the next steps and a checklist of required documentation along
with the grant agreement before disbursing funds. These
checklists are also available on the HCD Web site. Once HCD has
received, reviewed, and approved the appropriate documentation,
it will disburse the funds to the applicant.
What's the problem? The author points to instances in his
district in which an applicant was asked on multiple occasions
to provide additional documentation, which resulted in
months-long delays in the disbursement of funds. HCD has met
with the author's office and is actively working to rectify
delays and any ambiguities in the program. HCD has taken steps
to streamline its application process and remove procedural
requirements, and posted checklists for the program on its
department website. Additionally, HCD provides standard
agreement trainings across the state and has offered to provide
webinars for more rural districts. HCD also has technical
assistance advisors available to answer questions to navigate
the process.
Program deadlines and procedural requirements such as those in
this bill are generally not provided in statute to give the
agency flexibility to adopt its own procedures and make
necessary changes to align with federal requirements, as needed.
In the author's view, however, placing timelines in statute
will further ensure HCD is notifying applicants of their duties
and ensuring the disbursement of funds in a timely fashion.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
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SUPPORT: (Verified8/17/15)
California State Association of Counties
Community Development Commission of Mendocino County
Leading Age California
Rural County Representatives of California
West Company
OPPOSITION: (Verified8/17/15)
None received
ASSEMBLY FLOOR: 77-0, 6/2/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd,
Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo
Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley,
Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer,
Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,
Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon,
Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark
Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams,
Wood, Atkins
NO VOTE RECORDED: Chávez, Eggman, Grove
Prepared by:Alison Dinmore / T. & H. / (916) 651-4121
8/18/15 12:48:42
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