BILL ANALYSIS Ó
AB 325
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CONCURRENCE IN SENATE AMENDMENTS
AB
325 (Wood)
As Amended July 1, 2015
Majority vote
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|ASSEMBLY: | 77-0 | (June 2, |SENATE: |38-0 |(August 20, |
| | |2015) | | |2015) |
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Original Committee Reference: H. & C.D.
SUMMARY: Makes specified changes to the Community Development
Block Grant (CDBG) program application process. Specifically,
this bill:
1)Requires the Department of Housing and Community Development
(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.
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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.
The Senate amendments:
1)Provide that the 60 days' notice requirement shall not apply
if the federal government or the Legislature makes significant
changes to the CDBG Program.
2)Authorize HCD to 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
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government or the Legislature requires changes.
3)Require HCD to provide a grant agreement to an applicant no
later than 60 days after HCD notifies the applicant that it
was approved for funds, rather than enter into the agreement
with the applicant within 60 days.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
Background of the CDBG program: The CDBG program was
established by the United States (U.S.) 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 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.
Congress amended the HCD Act in 1981 to give each state the
opportunity to administer CDBG funds for small cities and
counties. Since 1983, HCD has administered the state CDBG
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program in California. Under the state CDBG Program, states
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 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, 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.
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.
Purpose of the bill: 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 resources to navigate the complicated and drawn-out
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grant process. To make the program more accessible, this bill
seeks to establish a timeline to improve stability and
predictability for grant applicants.
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 Web site.
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.
Senate amendments provide flexibility to HCD in meeting program
deadlines under specified circumstances, such as if the
applicant makes changes to the original application or the
federal government or the Legislature requires changes. Senate
amendments also require HCD to provide a grant agreement to an
applicant no later than 60 days after HCD notifies the applicant
that it was approved for funds, rather than enter into the
agreement with the applicant within 60 days.
Analysis Prepared by:
Rebecca Rabovsky / H. & C.D. / (916) 319-2085
FN:
0001460
AB 325
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