BILL ANALYSIS
AB 1629
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1629 (Budget Committee)
As Amended October 6, 2010
2/3 vote. Urgency
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|ASSEMBLY: | |(April 22, |SENATE: |34-2 |(October 7, |
| | |2010) | | |2010) |
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(vote not relevant)
Original Committee Reference: BUDGET
SUMMARY : Contains necessary statutory and technical changes to
implement changes to the Budget Act of 2010.
The Senate amendments delete the Assembly version of the bill,
and instead:
1)Assist with the financing of Bay Area Housing Program (BAHP)
homes acquired to serve consumers moving into the community,
from the closure of Agnews Developmental Center.
2)Modify statute governing the California Health Facilities
Financing Authority (CHFFA), to secure alternative financing
and results in over $26 million in cost avoidance due to lower
interest rates. Statute is amended to allow funding of
residential facilities for persons with developmental
disabilities who have specialized health care needs. Given the
States arrangement with regional centers, clarification is
made to the term "participating health institution."
3)Restructure the bonds as "health facility bonds" and changes
the permanent lender to the CHFFA. Changes will allow
Cal-Mortgage to offer insurance for the bonds issues by CHFFA.
4)Establish loan criteria for the California Housing Finance
Fund (CalHFF), only for the repayment of the line of credit
that funded the BAHP loans. The short-term general fund loan
would only be activated should CHFFA fail to enter into a Bond
Purchase Agreement prior to January 15, 2011. Should it need
to be issued, the loan would be repaid from the proceeds of
the California Health Facilities issuance of bonds for the
program prior to June 30, 2011.
AB 1629
Page 2
5)Urgency Clause. Declare this bill take effect immediately as
an urgency statute.
AS PASSED BY THE ASSEMBLY , this bill was a vehicle for 2010
Budget legislation.
EXISTING LAW : The homes were purchased under a short-term loan
agreement with Bank of America, and with permanent financing
tied to a bond issuance by the CalHFA.
The global credit crisis and housing crisis disrupted the market
for taxable and tax-exempt housing bonds resulting in much
higher interest rates than originally estimated. To avoid
paying higher rates, CalHFA has been carrying the properties on
a line of credit that expires February 28, 2011. Unless
alternative funding is secured, CalHFA will have to sell the
bonds as "housing bonds" and at the higher interest rates.
Analysis Prepared by : Daisy Gonzales / BUDGET /
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