BILL ANALYSIS
AB 570
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 570 (Arambula)
As Amended June 15, 2009
Majority vote
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|ASSEMBLY: |55-21|(May 11, 2009) |SENATE: |23-12|(August 24, |
| | | | | |2009) |
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Original Committee Reference: H. & C.D.
SUMMARY : Reduces 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
Matching Grant Program (Program), administered by the Department
of Housing and Community Development (HCD), from $1 million to
$500,000.
The Senate amendments require a city and county to have
submitted an annual progress report update on their housing
element within the last 12 months to be eligible to apply for
the Program. Provide that for a non-profit organization to be
eligible for funding the city and or county in which it is
located must have submitted an annual progress report update on
their housing element within the last 12 months. Make this
requirement contingent upon HCD having adopted the form
necessary to file the annual report.
AS PASSED BY THE ASSEMBLY , this bill reduced 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 Matching Grant Program (Program),
administered by the HCD, from $1 million to $500,000.
Specifically, this bill :
1)Required, before an application can be considered, an
applicant for a newly established trust fund must provide
adequate documentation, as determined by HCD, that an
ordinance imposing or dedicating a tax or fee to be deposited
in the new trust or a legally binding commitment to deposit
the matching funds in a trust has been adopted.
2)Prohibited HCD from disbursing any funds to any trust until
all matching funds are on deposit.
AB 570
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3)Provided that funds may only be disbursed in the amounts
necessary to fund projects that have been identified to
receive a loan from a trust with in a reasonable period of
time.
4)Provided 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 : Negligible state costs. Potential reallocation
toward smaller counties of a portion of the $17.5 million in
grants currently set aside under the existing Program for newly
created housing trusts.
COMMENTS : In 2002, California voters approved Proposition 46,
the $2.1 billion Housing and Emergency Shelter Trust Fund Act.
Proposition 46 provided funding for the following programs:
Multifamily Housing Program; Emergency Housing Assistance
Program; Supportive Housing; Farmworker Housing Grant Program;
CalHome Program; Local Housing Trusts; Code Enforcement Program;
California Homebuyer Downpayment Assistance Program; and, Jobs
Housing Improvement Account. Funds provided under Proposition
46 were mostly exhausted by the end of 2006. In November 2006,
California voters approved Proposition 1C, the Housing and
Emergency Trust Fund Act of 2006. Proposition 1C maintains
funding provided under Proposition 46 for most, but not all, of
the programs noted above. One of the programs not included in
Proposition 1C was funding for local housing trusts.
Proposition 1C did include however, $100 million for the
Affordable Housing Innovation Fund to be used for "competitive
grants or loans to sponsoring entities that develop, own, lend,
or invest in affordable housing and are used to create pilot
programs to demonstrate innovative, cost-saving approaches to
creating or preserving affordable housing."
In 2007, the case was successfully made that local housing
trusts are inherently innovative, that is local housing leaders
can design individualized local programs to address affordable
housing needs in their communities. Therefore, $35 million was
made available for local housing trusts to apply for grants.
One-half of the $35 million is to be made available strictly for
new trusts. Additionally, when awarding grants to new trusts,
HCD is required to set aside funding for a period of 36 months
for trusts in counties with a population of less than 425,000.
AB 570
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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. Newly formed trusts in smaller counties would be
required to provide a match of $500,000 rather than $1 million.
Similar legislation: This bill is similar to AB 1129 (Arambula)
from last session. Governor Schwarzenegger vetoed the bill with
the following veto message: "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."
The author has addressed the concern raised in the Governor's
veto message by requiring the local housing trust to have
matching funds on deposit before HCD may disburse funds. The
bill outlines two possible sources of the funding, either a fee
or tax that the local jurisdiction imposes to fund the match or
a legal binding commitment. HCD has discretion to determine
whether the documentation is adequate to qualify for a match of
Program funds. Additionally, once funds are on deposit they may
only be disbursed to fund projects identified to receive a loan
as determined by HCD.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085
FN: 0001707