BILL ANALYSIS Ó
AB 2319
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Date of Hearing: April 13, 2016
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
David Chiu, Chair
AB 2319
(Gordon) - As Introduced February 18, 2016
SUBJECT: California Infrastructure and Economic Development
Bank
SUMMARY: Authorizes the California Infrastructure and Economic
Development Bank (IBank) to provide financial assistance to
affordable housing projects. Specifically, this bill:
1)Defines "affordable housing" to mean a dwelling available for
purchase or lease by persons and families who qualify as
extremely low-, very low-, low- or moderate-income as defined.
2)Makes an appropriation by expanding the authority of the IBank
to expend funds in a continuously appropriated fund.
EXISTING LAW:
1)Establishes the I-Bank within the Governor's Office of
Business and Economic Development (GO-Biz) and authorizes it
to undertake a variety of infrastructure related financial
activities including, but not limited to, the administration
of a revolving loan fund, oversight of the Small Business
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Finance Center, and the issuance of tax-exempt and taxable
revenue bonds.
2)Defines "project" for purposes of the IBank to mean designing,
acquiring, planning, permitting, entitling, constructing,
improving, extending, restoring, financing and generally
development of public development facilities or economic
development facilities within the state or financing
transition costs or the acquisition of property or both upon
approval of financing order by the Public Utilities
Commission.
3)Defines "extremely low-income households" to mean persons and
families whose incomes do not exceed 30% of median area
income.
4)Defines "very low-income households" to mean persons and
families whose incomes do not exceed 50% of median area
income.
5)Defines "low-income households" to mean persons and families
whose income does not exceed 80% of median area income.
6)Defines "moderate-income households" to mean persons and
families of low- or moderate- income whose income exceeds the
income limit for lower income households.
FISCAL EFFECT: Unknown. 2/3 vote.
COMMENTS:
Overview of the IBank: The I-Bank was established in 1994 to
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promote "economic revitalization, enable future development, and
encourage a healthy climate for jobs in California." Housed
within GO-Biz, it is governed by a five-member board of
directors comprised of the Director of GO-Biz (chair), the State
Treasurer, the Director Department of Finance, the
Transportation Agency, and a Governor's appointee. With the
exception of funds for program support and the Small Business
Loan Guarantee Program administration, which must be annually
appropriated by the State Legislature, all IBank funds are
continuously appropriated without regard to fiscal year. The
I-Bank administers three programs: (1) the Infrastructure State
Revolving Fund which provides direct low-cost financing to
public agencies for a variety of public infrastructure projects;
(2) the Conduit Bond Program which provides financing for
manufacturing companies, public benefit nonprofit organizations,
public agencies and other eligible entities; and (3) the Small
Business Finance Center which helps small businesses access
private financing through loan guarantees, direct loans, and
performance bond guarantees.
Overview of the State's Housing Departments and Agencies :
The California Housing Finance Agency (CalHFA) is the state's
affordable housing lender. CalHFA funds its programs by issuing
bonds and then repays the bonds with loan proceeds. The agency
is completely self-supporting and receives no General Fund
money. The agency provides low interest rate mortgages to low
and moderate income homebuyers in California, as well as down
payment and closing costs assistance. Since inception, CalHFA
has provided $19.6 billion in mortgages to 153,000 first-time
homebuyers. CalHFA loans are used for the acquisition,
rehabilitation and permanent financing to preserve, maintain and
increase the supply of affordable multi-family rental housing.
Since its creation, CalHFA has made $192 million in loans for
affordable housing.
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Purpose of this bill : According to the author, "AB 2475 creates
a forgivable loan program, housed within the IBank, to assist
local governments in financing critical new affordable housing
projects. The program will hold loan recipients accountable to
meeting required criteria that contribute positive outcomes back
to the state as well as local communities. Through working
together, local governments, developers, and the state can
integrate major regional planning and development targets into
much needed affordable housing projects. In return, loans will
be eligible for partial or full forgiveness upon project
completion. AB 2475 takes advantage of the IBank's expertise in
development financing, and places responsibility for
administering this new program there. However, the bill also
recognizes that meeting the specific requirements of the program
are essential to its success. Because of this, the loan
forgiveness determination occurs after project completion, and
requires that IBank consults with the Strategic Growth Council
(SGC) and California Housing Finance Agency (CalHFA) on whether
the project meets the required criteria. By integrating these
entities into the final project review, the IBank will be able
to leverage experts in sustainable development and housing
finance to ensure that the criteria of the program have been
met."
Staff comments: The IBank currently has approximately $300
million of infrastructure loans in its pipeline. Adding to the
types of loans it makes would add to the demand for IBanks
existing programs. The IBank does not provide loans for
affordable housing developments so its staff is not familiar
with underwriting necessary to make these loans. The committee
may wish to consider an amendment to make clear that the IBank
may provide loans for infrastructure that supports affordable
housing rather than the development itself.
Committee amendments:
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1) (b) " Infrastructure for A affordable housing" means
infrastructure that supports affordable housing. Affordable
housing is defined as dwellings available for purchase or
lease by persons and families who qualify as low- or
moderate-income, as defined in Section 50093 of the Health
and Safety Code, very low income households, as defined in
Section 50105 of the Health and Safety Code, or extremely
low income households, as defined in Section 50106 of the
Health and Safety Code.
2) p) (q) "Project" means designing, acquiring, planning,
permitting, entitling, constructing, improving, extending,
restoring, financing, and generally developing public
development facilities facilities, infrastructure for
affordable housing, or economic development facilities
within the state or financing transition costs or the
acquisition of transition property, or both, upon approval
of a financing order by the Public Utilities Commission, as
provided in Article 5.5 (commencing with Section 840) of
Chapter 4 of Part 1 of Division 1 of the Public Utilities
Code.
3) Page 5, line 16, delete the second "facilities"
Double referred : If AB 2319 passes this committee, the bill
will be referred to the Committee on Jobs, Economic Development,
and the Economy.
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REGISTERED SUPPORT / OPPOSITION:
Support
California Apartment Association
California State Association of Counties (CSAC)
League of California Cities
City of Lakeport
City of Oakland
Opposition
None on file
Analysis Prepared by:Lisa Engel / H. & C.D. / (961) 319-2085,
Lisa Engel / H. & C.D. / (916) 319-2085
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