BILL ANALYSIS Ó AB 2783 Page 1 Date of Hearing: May 18, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2783 (Eduardo Garcia) - As Amended April 25, 2016 ----------------------------------------------------------------- |Policy |Housing and Community |Vote:|7 - 0 | |Committee: |Development | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill requires the Strategic Growth Council (SGC) to consider revisions to the guidelines and selection criteria for affordable housing projects that qualify under the Affordable Housing and Sustainable Communities Program (AHSC) for the Rural AB 2783 Page 2 Innovation Project Area (RIPA). The bill further requires SGC to provide a written explanation to the Assembly Committee on Housing and Community Development by March 1, 2017, if the SGC determines it will not make revisions. FISCAL EFFECT: 1)One-time costs to the SGC of approximately $120,000 (GF) for two staff at 1/3 PY and outreach travel, to determine whether the guidelines and selection criteria need to be revised, and to either make the revisions or report to the Assembly Committee on Housing and Community Development as to why not. 2)Minor and absorbable costs to the Air Resources Board (ARB) to implement any guideline revisions. COMMENTS: 1)Purpose. The California Coalition of Rural Housing asserts, "AB 2783 will help eliminate barriers faced by rural communities to access the AHSC program to build safe affordable housing. Rural communities throughout the state have been systematically overlooked and as a result have not received investments from the AHSC program which will help these communities increase their access to affordable housing while also achieving greenhouse gas reductions. In 2015, there were no rural affordable housing projects that received funding from the AHSC. Despite the RIPA being established by the SGC to address inequitable distribution of fund[s], there are still threshold barriers that hinder rural communities in the state having access to the investments needed to help combat climate change while also achieving other co-benefits." AB 2783 Page 3 This bill requires the SGC to reexamine the selection criteria in order to improve access to the RIPA funds for rural communities. 2)Background. In 2014, the Legislature created the AHSC program which is funded through cap-and-trade proceeds and administered by the SGC and the Department of Housing and Community Development (HCD). SB 862 (Senate Budget and Fiscal Review Committee) Chaptered 862, Statutes of 2014, continuously appropriated 35% of the cap-and-trade funds for investments in transit, affordable housing, and sustainable communities. Of this, 10% is for transit and inter-city rail capital programs administered by the Department of Transportation (Caltrans) and the California Transportation Commission (CTC); 5% is for low carbon transit operations through the State Transit Assistance formula; and 20% is for affordable housing and sustainable communities, with half of this funding going to affordable housing projects that demonstrate a reduction in greenhouse gases. In order to meet this standard, an affordable housing project must combine both density and proximity to public transportation in order to result in fewer vehicle miles traveled which will reduce our overall greenhouse gas production. 3)Recent Guideline Revisions. Recognizing that rural projects were not able to compete well against urban projects, in the fall of 2015, the SGC revised the guidelines for the AHSC program to set-aside 10% of the total funding for AHSC for rural areas. This change eliminated the competition between rural and urban projects and allowed rural projects to compete against each other rather than against urban projects that can generally show a greater reduction in vehicle miles traveled. AB 2783 Page 4 In January 2016, the SGC released a notice of funding availability for the AHSC program which included the new RIPA set aside and guidelines. In response, they received a total of 130 applications in all categories, 23 of the applications are for RIPA. HCD is in the process of determining which applicants will be asked to move to the next phase of the process and submit full applications. This bill requires the SGC to consider revising the guidelines again. The Committee may wish to consider whether another revision is necessary at this time. Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081 AB 2783 Page 5