BILL ANALYSIS
AB 570
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Date of Hearing: April 29, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 570 (Arambula) - As Amended: March 31, 2009
Policy Committee: Housing and
Community Development Vote: 5-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill makes various changes to the housing trust fund
matching grant program to facilitate greater access to program
funds for newly established housing trusts in smaller counties.
Specifically, this bill:
1)Reduces from $1 million to $500,000 the minimum grant amount a
newly established housing trust fund that represents a county
with a population of less than 425,000 can receive from the
local housing trust fund (LHTF) program, administered by the
Department of Housing and Community Development (HCD).
2)Requires that, prior to a grant being considered by HCD, the
local entity must either (a) provide a legally binding
commitment to deposit matching funds to the newly established
trust fund, or (b) adopt an ordinance which dedicates a tax or
fee to the new trust.
3)Prohibits HCD from disbursing funds to any trust until all
matching funds are on deposit.
4)Provides that in determining whether or not a county has a
population of less than 425,000, HCD must use the United
States Census for 2000.
FISCAL EFFECT
1)Negligible state costs.
2)Potential reallocation toward smaller counties of a portion of
AB 570
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the $17.5 million in grants currently set-aside under the
existing LHTF program for newly created housing trusts.
COMMENTS
1)Background . In November 2006, California voters approved
Proposition 1C, the $2.85 billion Housing and Emergency
Shelter Trust Fund Act of 2006. The bond act included $100
million for the affordable housing innovation fund and
required that the Legislature program the specific uses and
eligibility requirements for these funds. SB 586 (Dutton),
Chapter 652, Statutes of 2007, allocated these funds to four
separate programs, including $35 million for the LHTF program,
administered by the Department of Housing and Community
Development (HCD).
The LHTF program matches contributions to local housing trust
funds. The grant from HCD matches the local contributions on a
dollar-for-dollar basis from a minimum of $1 million to a
maximum of $2 million. The local housing trusts may use
program funds to support emergency shelters, rental housing,
and for-sale housing affordable to households ranging from
extremely low-income to moderate-income.
Under SB 586, half of the $35 million allocated to this
program by Proposition 1C is reserved for newly established
housing trust funds. Within this allocation is a setaside for
an amount to be determined by HCD for trust funds in counties
with a population of less than 425,000 persons.
2)Purpose . This bill seeks to allow smaller, rural county
housing trusts to better compete for state housing trust fund
grants by lowering the minimum grant amount for newly
established small county trusts. According to the author,
rural areas have fewer local resources for housing programs,
and thus face challenges in winning state grants that have
larger minimum thresholds.
3)Prior legislation. This bill is similar to AB 1129 (Arambula)
from last session. The governor vetoed the bill, indicating
that, while he supported the smaller minimum grants for rural
counties, he had concerns that the bill did not explicitly
prohibit local expenditure of state funds without accompanying
matching funds. This bill attempts to address that concern by
requiring the local housing trust to have matching funds on
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deposit before HCD may disburse state funds.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081