BILL ANALYSIS Ó SB 944 Page 1 Date of Hearing: June 15, 2016 ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT David Chiu, Chair SB 944 (Committee on Transportation and Housing) - As Amended May 31, 2016 SENATE VOTE: 37-0 SUBJECT: Housing omnibus SUMMARY: Makes non-controversial changes to sections of law relating to housing. EXISTING LAW: Various sections of law relating to housing. FISCAL EFFCT: According to the Senate Appropriaitons Committee, this bill would have unknown cost pressures related to the expansion of allowable uses for MPRROP funds. Authorizing loans for replacement of a low-income homeowners mobilehome is not likely to have a significant impact on available funding. Minor costs to the Department of Housing and Community Development (HCD) to revise MPRROP regulations to provide for mobilehome replacement loans. The remaining provisions are not expected to have a significant state fiscal impact. COMMENTS: The Senate Committee on Transportation and Housing is SB 944 Page 2 authoring this year's housing omnibus bill as a cost-effective way of making a number of minor, non-controversial changes to statute at one time. All provisions of the bill have been reviewed and vetted by a stakeholder group that includes representatives of the majority and minority policy consultants in both the Senate and the Assembly. There is no known opposition to any of the items in the bill. If issues arise that cannot be resolved, the provision of concern will be deleted from the bill. This bill makes non-controversial changes to sections of law relating to housing. Specifically, the bill includes the following provisions. The proponent of each provision is noted in brackets. 1)Clarification to Mutual Self-Help Housing (Section 1). Ten local non-profit community development organizations operate mutual self-help homeownership programs in rural California (programs that assist groups of low-income families who work together to build their own homes). Local governments and others are sometimes unclear about the role that the non-profit plays in the program. It is possible to interpret the current code definition of a contractor to include the work done by the self-help program operators. However the State Contractor's License Board has also said that by acting in a specific manner, the programs would be considered exempt. Rather than leaving the matter subject to interpretation, the proposed amendment to the California Business and Professions Code would clarify that non-profits that specifically operate this mutual self-help program are not acting as contractors. This proposal will codify a practice that has been in place for the past 50 years and insure that the program can continue to assist rural families. [California Coalition for Rural Housing] 2)Mobile home disposal: Minor program changes (Sections 2, 3, SB 944 Page 3 and 20). AB 999 (Daly, Chapter 376, Statutes of 2015) passed last year with no controversy. However, in the implementation of the new mandate, the Department of Housing and Community Development (HCD) and interested parties are finding that the 10-day period given in the statute (Civil Code Section 798.56(e)) is not enough time for management to make a decision on whether to dispose of an abandoned mobilehome. As a result, this new program is not being used. Additionally, HCD realized after AB 999 was passed that it needed regulations to create the forms required by the new law. This bill changes the time in which management must file a notice of disposal with HCD from 10 days to 30 days after the date of sale. This bill also gives HCD authority to draft guidelines for new procedures and forms until final regulations may be formally adopted. [Western Manufactured Housing Communities Association] 3)Transitional Housing Misconduct Act: Move to Civil Code (Sections 4 and 25). The Transitional Housing Misconduct Act is a special law that allows transitional housing operators to remove problematic residents with a simple injunction action, rather than going through the entire landlord-tenant eviction law. It also allows for interim options, with court enforcement, rather than only eviction. Unfortunately, because it is located in the middle of HCD's finance program laws, it is difficult to find and often isn't even understood by courts and housing providers. This bill moves this law to the Civil Code that already deals with landlord-tenant statutes, where the courts and housing providers are more likely to look for such a law. [Senate Transportation and Housing Committee] 4)Definition of "electric vehicle charging station" and "charging stations": Correct code reference (Section 5). Legislation passed in 2014 regulating lease terms on electric vehicle charging stations included inconsistent definitions of "electric vehicle charging station" and "charging station." Civil Code Section 1947.6(c) references the definition in the SB 944 Page 4 California Electrical Code, while Civil Code Section 1952.7(c)(1) references the definition in the National Electrical Code. The California Electrical Code is based on the model National Electrical Code, but contains amendments made by state agencies with statutory authority. These amendments were not originally included in the national model code. This bill corrects the discrepancy by changing the definition in Section 1952.7 of the Civil Code to refer to the California Electrical Code. [Department of General Services] 5)Common interest developments: Resolve conflicts between code sections relating to declarations (Section 6). There are conflicts between Civil Code Sections 4270 and 4225, 4230 and 4235 relating to amending declarations. Section 4270 already makes an exception for an alternate amendment process described in Section 4275. This bill resolves the conflicts by adding exceptions for the alternate processes in Sections 4225, 4230, and 4235 to the existing exception in Section 4270. [Educational Community for Homeowners (ECHO)] 6)Common interest developments: Renumber a Civil Code section (Section 7). The California Law Revision Commission (CLRC) revised the numbering in the Davis-Stirling Act with the intent to avoid decimals. Accordingly, the CLRC left ample room between existing whole-numbered sections. Despite this, Civil Code Section 4750 concerns personal agriculture, while Civil Code Section 4750.10 addresses clotheslines. Since clotheslines are not particularly related to personal agriculture, this bill replaces the statute number containing a decimal with a whole number. [Educational Community for Homeowners (ECHO)] 7)Common interest developments: Annual budget reports (Section 8). Last year, the legislature passed and the Governor signed AB 596, which requires a homeowners association (HOA) in a common interest development (CID) to disclose to the owners if SB 944 Page 5 the CID is an approved condominium project pursuant to Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) guidelines. Section 5300(b)(10), which applies only to condominium projects, specifies the following wording that must be contained in the disclosure statement: "This common interest development [is/is not (circle one)] a condominium project." This bill eliminates the "is/is not a condominium" question from Section 5300(b)(10), since the section only applies to condos. [Community Associations Institute-California Legislative Action Committee (CAI-CLAC)] 8)Common interest developments: Correct a Civil Code section reference (Section 9). Civil Code Section 5570(b)(2) defines the term "major component" to have the same meaning as specified in Civil Code Section 55530. There is no Civil Code Section 55530. The reference is intended to be to Civil Code Section 5550, which does define the term. This bill corrects an inaccurate Civil Code section reference from Section 55530 to 5550. [Community Associations Institute-California Legislative Action Committee (CAI-CLAC)] 9)Housing discrimination: Update federal law citation (Section 10). In 1996, an amendment to Civil Code Section 798.76 was made to reflect amendments to a federal law referenced therein, the Federal Fair Housing Act. A corresponding change was not made in Government Code Section 12955.9, which cites the same federal law. This bill corrects the name of the federal law to reflect amendments thereto. [Western Manufactured Housing Communities Association] 10)Eliminate conflicting methodology for HCD determination of regional housing need (Section 11). The second and third sentences of section 65584.01(b) below reference two different criteria that can result in conflicting calculations for whether HCD must accept the population forecast of a council of government (COG) in place of the population forecast of SB 944 Page 6 Department of Finance (DOF). Both criteria apply whether the COG forecast is within a range of 3% of DOF's determination. The 1st criterion compares COG and DOF "total" population. The 2nd criterion compares change and difference in population "growth" between COG and DOF total population. For example, SCAG, during the current 5th 2013-2023 housing cycle, only met the 1st criterion, which the Department allowed and prefers. In late 2015, HCD discussed criteria conflict and redundancy with local government and housing advocate members of the Housing Element Advisory Group, and that group agreed that the 2nd criterion is redundant. Removing the term "growth" used twice in 3rd sentence would resolve issue. [Senate Transportation and Housing Committee] 11)State notice law protections: Clarify reference (Section 12). The state notice law (Government Code Section 65863.10) applies to a variety of publicly supported affordable multifamily housing types. SB 1328 (2004) extended state notice protections to tenants of many types of affordable housing not previously covered. Among them were properties with expiring rent restrictions that were financed under tax-exempt mortgage revenue bond programs in Internal Revenue Code Section 142(d) and Government Code Section 65863.10(a)(3)(F). Prior to 1986, however, the mortgage revenue bond authority in Internal Revenue Code Section 142(d) was lodged in a different code section. Consequently, the specific reference to Section 142 potentially denies basic state notice protections to tenants in properties that were financed with mortgage revenue bonds prior to 1986. Last year, voucher tenants of a 1985 bond-financed property in Walnut Creek were left unprotected by the state notice law because of this oversight. This bill clarifies that these protections apply to properties financed by the program in Internal Revenue Code Section 142 as well as corresponding sections in the prior code. [Housing Advocates] SB 944 Page 7 1)Referencing International Codes (Section 13). Subdivision (a) of California Health and Safety Code Section 17913 refers to "the uniform codes" as the model codes in California. However, there are other model codes related to residential construction in California (International Codes published by the International Code Council) that need to be referenced. The amendment to subdivision (a) updates the reference to the codes currently adopted in California. [Senate Transportation and Housing Committee] 2)Remove outdated building code requirements (Section 14 and 15). California Health and Safety Code Section 17921.3 contains requirements for water closets and urinals. This section, by its terms, would remain operative only until January 1, 2014, or until the date on which the California Building Standards Commission included standards in the California Building Standards Code that conform to this section, whichever date is later. Mandatory provisions for water efficient plumbing fixtures and plumbing fittings were adopted in the 2013 California Green Building Code (CALGreen) and in the 2013 California Plumbing Code. This proposal repeals Section 17921.3 because there is no need for it to remain operative and to continue to be printed in the code. [Senate Transportation and Housing Committee] 12)Building Standards Commission submittals to the Office of Administrative Law (OAL) (Section 11, 20, and 22). Government Code Section 11356 exempts building standard regulations (including the Initial Statement of Reasons) from OAL review and approval. When the California Building Standards Commission (CBSC) approves an Initial Statement of Reasons and a Notice of Proposed Action (Notice), only the Notice is published by OAL in the California Regulatory Notice Register pursuant to Government Code Section 11344.1. However, Health and Safety Code Section 18935(a) requires CBSC to submit both the Initial Statement of Reasons and the Notice to OAL. This SB 944 Page 8 bill eliminates an unnecessary requirement in order to achieve consistency with existing law. [Department of General Services] 3)Remove outdated provisions (Section 15). California Health and Safety Code Section 17921.9 contains provisions for CPVC plastic piping and safe work practices. This section became inoperative on January 1, 1998, by its own terms. This proposal removes Section 17921.9 because there is no need for it to remain in the code. [Senate Transportation and Housing Committee] 4)Replace outdated code references (Section 16). California Health and Safety Code Section 17922 contains provisions related to the California Building Standards and other rules and regulations adopted by HCD, and refers to "the uniform model codes". However, some of these uniform model codes are no longer adopted in California. The amendments to subdivisions (a) and (b) update the language and refer to the model codes currently adopted in California. [Senate Transportation and Housing Committee] 5)Deletes a citation to an outdated building code reference (Section 17). California Health and Safety Code Section 17922.3 contains provisions governing moved residential structures. The language in this section refers to the 1991 Uniform Building Code (UBC), Section 104, for the requirements for existing buildings, including moved buildings. The UBC is no longer a model code in California; the requirements for existing buildings in California are currently in the California Existing Building Code (2015 IEBC is the model code). This proposal deletes that citation because is no need SB 944 Page 9 for a reference to code not adopted in California. [Senate Transportation and Housing Committee] 6)Deletes a citation to an outdated building code reference (Section 18). California Health and Safety Code Section 17958.1 authorizes cities and counties to permit efficiency units, and refers to the "Uniform Building Code" for the meaning of the term "efficiency unit." However, the Uniform Building Code is no longer a model code in California; the definition of "efficiency unit" and the section containing the requirements for efficiency units are located in the California Building Code (the International Building Code is the model code). This proposal deletes that citation because is no need for a reference to code not adopted in California. [Senate Transportation and Housing Committee] 7)Corrects a spelling error (Section 19). California Health and Safety Code Section 17959.1 (a) requires cities or counties to administratively approve applications to install solar energy systems. The modifications to subdivision (a) corrects a spelling error. [Senate Transportation and Housing Committee] 13)Tribally designated housing entities (Sections 23 and 24). State Health and Safety Code Section 50074 describes the types of housing sponsors that are eligible to participate in housing programs administered by HCD. The federal Native American Housing Assistance Self Determination Act of 1996 (NAHASDA) establishes a specific category of housing sponsor, the "tribally designated housing entity," that is neither enumerated in Section 50074 or defined in existing language. As such, tribes have never participated in HCD's programs. This bill defines "tribally designated housing entity" by reference to federal code and specifies that tribally designated housing entities are housing sponsors eligible for assistance from HCD. [Northern Circle Indian Housing SB 944 Page 10 Authority] 14)Mobilehome Park Rehabilitation and Resident Ownership Program: Clarify intent (Section 26). AB 225 (Chau and Nestande, Chapter 493, Statutes of 2014) gave HCD greater flexibility to administer the Mobilehome Park Rehabilitation and Resident Ownership Program. The bill allowed recipients of program funds (e.g., resident organizations, local public entities, nonprofit sponsors) to make loans to lower-income mobilehome owners to assist them in repairing their mobilehomes. The bill was intended to allow HCD to operate this program in a manner similar to the CalHOME program, such as by providing loans to residents to replace their mobilehomes. This bill further clarifies the intent of legislation. [Assembly Housing and Community Development Committee] Double-referred: SB 944 was also referred to the Committee on Judiciary, where it will be heard should it pass out of this committee. REGISTERED SUPPORT / OPPOSITION: Support None on file SB 944 Page 11 Opposition None on file Analysis Prepared by: Lisa Engel / H. & C.D. / (916) 319-2085