BILL ANALYSIS
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THIRD READING
Bill No: AB 570
Author: Arambula (I)
Amended: 6/15/09 in Senate
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 8-3, 6/9/09
AYES: Lowenthal, DeSaulnier, Hollingsworth, Kehoe,
Oropeza, Pavley, Simitian, Wolk
NOES: Huff, Ashburn, Harman
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 55-21, 5/11/09 - See last page for vote
SUBJECT : Local Housing Trust Fund Matching Grant Program
SOURCE : San Joaquin Valley Housing Trust
DIGEST : This bill makes various changes to the Local
Housing Trust Fund Matching Grant Program to facilitate
access to program funds for newly established housing
trusts in smaller counties.
ANALYSIS : 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
CONTINUED
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four separate programs, including $35 million for the Local
Housing Trust Fund Matching Grant (LHTF) program,
administered by the Department of Housing and Community
Development (HCD).
Under existing law, the LHTF program matches contributions
to local housing trust funds. To be eligible for matching
funding, a local housing trust fund must receive
contributions from private or governmental sources that are
not otherwise restricted for housing programs. The grantee
must also have an HCD-approved housing element, or if a
nonprofit, fund projects located in jurisdictions with
approved elements. The grant from HCD matches the local
contributions on a dollar-for-dollar basis at a minimum of
$1 million and up to a maximum of $2 million. HCD must
receive adequate documentation that the local matching
funds have been deposited in the fund and of the source of
these funds. The local housing trusts may in turn use LHTF
program funds to support emergency shelters, rental
housing, and for-sale housing affordable to households
ranging from extremely low-income to moderate-income. If
an awardee fails to continue funding and operating the
local housing trust fund for at least five years, then the
trust must repay HCD's award to the extent the funds have
not yet been legally encumbered to specific projects.
Under SB 586 (Dutton), Chapter 652, Statutes of 2007, half
of the $35 million allocated to this program by Proposition
1C is reserved for newly established housing trust funds,
as defined by HCD. Within this setaside for newly
established housing trust funds is an additional 36-month
setaside of an amount to be determined by HCD for trust
funds in counties with a population of less than 425,000
persons.
This bill makes a number of changes to the LHTF program.
Specifically, the bill:
1. Provides that the 425,000 population threshold for the
setaside reserved for newly established housing trust
funds in smaller counties shall be based on the 2000
census, as opposed to the most recent population
estimates of the Department of Finance.
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2. Lowers the minimum matching grant for a newly establish
housing trust fund in a county with a population of less
than 425,000 persons from $1 million to $500,000.
3. Provides that newly established housing trust funds need
not have the matching funds on deposit at the time of
application to HCD but must instead provide adequate
documentation, as determined by HCD, that an ordinance
imposing or dedicating a tax or fee to be deposited into
the new trust has been enacted or the applicant has
adopted a legally binding commitment to deposit matching
funds into the new trust.
4. Provides that HCD shall not disburse funds to any trust
until all matching funds are on deposit and that
disbursements shall be in the minimum amounts necessary
to meet a trust's commitments to specific projects.
5. Requires a local government to submit their latest
housing element annual report prior to receiving LHTF
funds.
Prior legislation . In 2008, the author carried a similar
bill, AB 1129. That bill was vetoed. The Governor's
signing message stated: "I am supportive of providing
additional flexibility for small rural jurisdictions to
participate in the Local Housing Trust Fund program by
reducing the minimum participation level and allowing
flexibility for local governments to provide dedicated fee
revenue in lieu of a one-time match. However, the bill is
silent on when local governments may expend state funds
that are on deposit awaiting local matching funds.
Allowing local governments to expend state funds without
the accompanying local matching funds undermines the
purpose of a matching grant program."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 6/30/09)
San Joaquin Valley Housing Trust (source)
Affordable Homes Collaborative
Aging Services of California
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California Rural Legal Assistance Foundation
Housing California
Non-Profit Housing Association of Northern California
San Luis Obispo County Housing Trust Fund
Western Center on Law and Poverty
ARGUMENTS IN SUPPORT : According to the author's office,
this bill allows smaller, rural county housing trusts to
better capture state matching grants. The author's office
is particularly interested in facilitating the development
of the eight-county San Joaquin Valley Regional Housing
Trust (SJV Trust). The SJV Trust will not be one trust but
rather a coordinated association of several trusts, some of
which will serve single counties. The matching resources
available under the LHTF program are critical to generating
funding commitments from participants. Due to their small
size, many of the jurisdictions in the SJV Trust are
unlikely to be able to meet the current $1 million minimum
match requirement. This bill lowers the minimum grant for
small counties to $500,000. Due to their limited budgets,
it is also difficult for smaller counties to hold precious
matching funds idly on deposit while HCD considers a
jurisdiction's application. This bill allows new housing
trusts to show that they have funding sources in place or
pledged rather than on deposit at the time of application.
Lastly, one of the counties in the San Joaquin Valley just
recently surpassed the 425,000 population threshold to
qualify for the small county setaside. This bill allows
this county and others that have surpassed the threshold
since the 2000 census to remain eligible for the small
county setaside.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Arambula, Beall, Bill Berryhill, Tom
Berryhill, Block, Blumenfield, Brownley, Buchanan,
Caballero, Charles Calderon, Carter, Chesbro, Conway,
Coto, Davis, De La Torre, De Leon, Eng, Evans, Feuer,
Fong, Fuentes, Furutani, Galgiani, Hall, Hayashi,
Hernandez, Hill, Huber, Huffman, Jones, Krekorian, Lieu,
Bonnie Lowenthal, Ma, Mendoza, Monning, Nava, John A.
Perez, V. Manuel Perez, Portantino, Price, Ruskin, Salas,
Saldana, Skinner, Solorio, Swanson, Torlakson, Torres,
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Torrico, Yamada, Bass
NOES: Anderson, Blakeslee, DeVore, Emmerson, Fuller,
Gaines, Garrick, Gilmore, Hagman, Jeffries, Knight,
Logue, Miller, Nestande, Niello, Nielsen, Silva, Smyth,
Audra Strickland, Tran, Villines
NO VOTE RECORDED: Cook, Duvall, Fletcher, Harkey
JJA:mw 6/30/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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