BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2783


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          Date of Hearing:  May 18, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          2783 (Eduardo Garcia) - As Amended April 25, 2016


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          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  








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          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."










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            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.   








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            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


















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