BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1628|
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THIRD READING
Bill No: AB 1628
Author: Committee on Budget
Amended: 8/16/16 in Senate
Vote: 27
SENATE BUDGET & FISCAL REVIEW COMMITTEE: 15-1, 8/11/16
AYES: Leno, Nielsen, Allen, Anderson, Beall, Block, Glazer,
Mitchell, Monning, Moorlach, Nguyen, Pan, Pavley, Roth, Wolk
NOES: Stone
NO VOTE RECORDED: Hancock
ASSEMBLY FLOOR: Not relevant
SUBJECT: No Place Like Home Program: financing
SOURCE: Author
DIGEST: This bill provides the financing framework for the No
Place Like Home (NPLH) program, and authorizes bond issuance,
loan agreements, and service contracts related to the program.
This bill also provides substantive and technical changes to
existing statutes governing the program.
ANALYSIS: AB 1618 (Committee on Budget, Chapter 43, Statutes of
2016) created the NPLH program. AB 1618 requires the Department
of Housing and Community Development (HCD) to award $2 billion
to counties for permanent supportive housing for the homeless;
establishes the framework for financing the NPLH program through
the counties; requires counties to annually report to HCD on
program status; addresses the process for validation of the
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financing; and addresses other matters regarding the NPLH
program.
This bill facilitates and authorizes the issuances of bonds by
the California Health Facilities Financing Authority (CHFFA) for
the purposes of establishing a grant program for counties to
develop and administer permanent supported housing for homeless,
chronically homeless and at risk of chronic homelessness. This
bill establishes a framework for the provision of housing
through authorized service contract, addresses loans to be made
by CHFFA for supportive housing, specifies the use for funds for
projects across the state, and provides administrative structure
for the program. Specifically, this bill:
1)Authorizes, allows or directs CHFFA to:
a) Issue taxable or tax-exempt bonds in an amount not to
exceed $2 billion for the purpose of financing permanent
supportive housing pursuant to the NPLH program.
b) Make secured or unsecured loans to HCD in connection
with financing permanent supportive housing pursuant to the
NPLH program.
c) Enter into one or more service contracts with HCD for
the provision of permanent supportive housing pursuant to
the NPLH program and allows CHFFA to pay HCD for these
services.
i) Service agreements are exempt from the public
contract code and subject to review by Mental Health
Services Oversight and Accountability Commission, and
deemed approved unless action is taken to disapprove
them.
d) Notify, twice annually, the State Controller of amounts
it is required to pay to HCD for any service contract
obligations.
2)Authorizes, allows and directs HCD to:
a) Enter into service contracts with CHFFA to provide
permanent supportive housing services, pursuant to
'competitive' and 'distribution' programs, as described
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below.
b) Enter into loan agreements with CHFFA, with loan
proceeds to be deposited into the No Place Like Home Fund,
to be used for permanent supportive housing.
c) Use payments received pursuant to any service contracts
to repay loans from CHFFA before any other allocation or
distribution.
d) Assign payments received pursuant to the service
contracts to CHFFA or the State Treasurer, and stipulates
that HCD's obligation to repay the loans is limited to
amounts received pursuant to its service contracts with
HCD.
3)Enumerates the Legislature's declarations that:
a) HCD is the state entity with sufficient expertise to
implement and oversee the supportive housing program.
b) CHFFA is authorized to issue bonds and consult with the
Mental Health Services Oversight and Accountability
Commission and the Department of Health Care Services
concerning the implementation of the supportive housing
program.
c) It is appropriate for HCD to provide grants or loans to
California counties to permanent supportive housing.
d) Bond funding will accelerate the availability of funding
for the grant or loan program to provide permanent
supportive housing compared to annual allocations from the
Mental Health Services Fund.
e) Consideration paid with respect to the service contracts
is fair and reasonable; the service contracts, payment on
service contracts, loan agreements and loan repayments are
not a debt or liability of the state; covenants to bond
holders of any bonds issued that it will not change
provisions of this and related statutes in a manner that
would impair the interests of the bond holder.
4)Provides for the payment into the NPLH Fund amounts of loans
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to HCD derived from bond proceeds to be used for implementing
the program and allows for up to five percent of deposits to
the NPLH Fund to be used for administrative expenses, and
allows for HCD to adopt emergency regulations to expedite the
award of moneys.
5)Provides that HCD shall award up to $2 billion, based on the
amount of principal amount of bonds sold, for permanent
supportive housing not exceeding $1.8 billion for a
competitive program and not exceeding $200 million for the
non-competitive distribution ("over the counter") programs as
set forth in existing statute.
a) Specifies that for competitive program:
i) HCD is to Issue its first request for proposals
under the competitive program no later than 180 days
after a final judgment regarding the validity of the
service contracts and the bonds.
ii) HCD is to monitor compliance by counties of any
grant and loan agreements and enforce those agreements in
order to provide for the provision of permanent
supportive housing and provide technical assistance to
participating counties or developers.
b) Specifies for the non-competitive distribution program:
i) HCD must provide the first allocation of moneys as
soon as reasonably practical and no later than 150 days
after a final judgment regarding the validity of the
service contracts or the bonds.
ii) Counties receiving funds must commit to providing
mental health supportive services, including substance
abuse treatment services, for 20 years, as with the
competitive program.
6)Allows for the loan of up to $2 million from the General Fund
to, among other activities indicated in existing statute,
allow HCD, CHFFA and the State Treasurer to pay for financial
advisory service and legal services in connection with any
validation action, with such loans repayable after the deposit
of loan proceeds resulting from the issuance of bonds.
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7)Requires HCD to annually report to CHFFA regarding permanent
supportive housing activities by the counties, process for
distributing funds, counties funds received, and
recommendations for modifications to the program.
8)Creates the Supportive Housing Program Subaccount in the
Mental Health Services Fund, with moneys in the subaccount
continuously appropriated to CHFFA to provide funds to meet
its obligations under any service contracts with HCD. The
State Controller shall transfer amounts to the subaccount
based on a certification from CHFFA of amounts necessary to
pay for the service contracts, not to exceed $140 million
annually, with subaccount moneys unavailable for loan to the
General Fund.
9)Includes the Legislature's declaration that this bill furthers
the intent of the Mental Health Services Act and provides for
an appropriation related to 2016 Budget Act.
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: No
According to the Senate Budget and Fiscal Review Committee, this
bill allows for bonds to be issued in an amount not to exceed $2
billion, with debt service not to exceed $140 million annually
when all the bonds have been issued. This bill will result in no
new state costs, but shift the use.
SUPPORT: (Verified8/15/16)
None received
OPPOSITION: (Verified8/15/16)
None received
Prepared by:Mark Ibele / B. & F.R. / (916) 651-4103
8/16/16 17:55:11
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