BILL NUMBER: AB 2362 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 13, 2010
AMENDED IN ASSEMBLY APRIL 8, 2010
INTRODUCED BY Assembly Members Skinner and Blakeslee
FEBRUARY 19, 2010
An act to amend Section 53545 of, and to add Chapter 4
(commencing with Section 50560) to Part 2 of Division 31 of, the
Health and Safety Code, and to amend Section 70 of the
Revenue and Taxation Code, relating to housing
taxation .
LEGISLATIVE COUNSEL'S DIGEST
AB 2362, as amended, Skinner. Soft-Story Housing Seismic
Retrofit Program. Taxation: property tax: soft-story
construction.
(1) The Housing and Emergency Shelter Trust Fund Act of 2006,
adopted and approved by the voters at the November 7, 2006, statewide
general election, authorized the issuance of bonds in the amount of
$2,850,000,000 pursuant to the State General Obligation Bond Law.
Existing law requires the transfer of $200,000,000 to the Housing
Urban-Suburban-and-Rural Parks Account for purposes relating to
housing-related parks grants in urban, suburban, and rural areas.
This bill would reduce the amount of funds transferred to the
Housing Urban-Suburban-and-Rural Parks Account to $150,000,000. The
bill would transfer the remaining $50,000,000 to the Soft-Story
Housing Seismic Retrofit Fund for purposes of the Soft-Story Housing
Seismic Retrofit Program, which the bill would establish. Pursuant to
the program, the Department of Housing and Community Development
would be required to make available, upon appropriation, grants to
qualifying cities, counties, or cities and counties for the provision
of loans to building owners for the seismic retrofit of soft-story
residential buildings, as defined, identified as being potentially
hazardous to life in the event of an earthquake.
(2)
(1) The California Constitution generally limits ad
valorem taxes on real property to 1% of the full cash value of that
property. For purposes of this limitation, "full cash value" is
defined as the assessor's valuation of real property as shown on the
1975-76 tax bill under "full cash value" or, thereafter, the
appraised value of that real property when purchased, newly
constructed, or a change of ownership has occurred.
The California Constitution authorizes the Legislature to exclude
from classification as "newly constructed" the construction or
installation in existing buildings of certain seismic retrofitting
improvements or improvements utilizing earthquake hazard mitigation
technologies.
This bill would, for a specified period, exclude from the
classification "newly constructed" the portion of reconstruction or
improvement to a soft-story residential building under the
Soft-Story Housing Seismic Retrofit Program , as
defined .
By changing the manner in which local assessors assess property
for property taxation purposes, this bill would impose a
state-mandated local program.
(3)
(2) The California Constitution requires the state to
reimburse local agencies and school districts for certain costs
mandated by the state. Statutory provisions establish procedures for
making that reimbursement.
This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
(4)
(3) Existing law provides that the Legislature
reimburse local agencies annually for certain property tax revenues
lost as a result of any exemption or classification of property for
purposes of ad valorem property taxation.
This bill would provide that, notwithstanding that provision, no
appropriation is made and the state shall not reimburse local
agencies for property tax revenues lost by them pursuant to the bill.
(5)
(4) This bill would provide that certain provisions
become inoperative if Senate Constitutional Amendment 4 of the
2008-09 Regular Session is approved by the voters at the June 8,
2010, statewide general election.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 4 (commencing with Section
50560) is added to Part 2 of Division 31 of the Health and Safety
Code, to read:
CHAPTER 4. SOFT-STORY HOUSING SEISMIC RETROFIT PROGRAM
50560. (a) There is hereby created the Soft-Story Housing Seismic
Retrofit Program, to be administered by the Department of Housing
and Community Development.
(b) There is hereby created in the State Treasury the Soft-Story
Housing Seismic Retrofit Fund. Notwithstanding Section 16305.7 of the
Government Code, any repayments, interest, or new appropriations
shall be deposited in the fund.
(c) Upon appropriation by the Legislature, the department shall
make moneys in the Soft-Story Housing Seismic Retrofit Fund available
in the form of grants to qualifying cities, counties, or cities and
counties for the provision of loans to building owners for the
seismic retrofit of soft-story residential buildings that have been
identified by the city, county, or city and county as being
potentially hazardous to life in the event of an earthquake.
(d) For the purpose of this section, the following terms have the
following meanings:
(1) "Qualifying city, county, or city and county" is a city,
county, or city and county that meets all of the following criteria:
(A) Has adopted an ordinance pursuant to Section 19162 to
establish building seismic retrofit standards applicable to the
seismic retrofit of buildings identified as being potentially
hazardous to life in the event of an earthquake.
(B) Has identified buildings pursuant to Section 19161 within its
jurisdiction that are potentially hazardous to life in the event of
an earthquake.
(C) Has an adopted housing element that the department has found
pursuant to Section 65585 of the Government Code to be in substantial
compliance with the requirements of Article 10.6 (commencing with
Section 65580) of Chapter 3 of Division 1 of Title 7 of the
Government Code and has submitted to the department the annual
progress report required by Section 65400 of the Government Code
within the preceding 12 months.
(D) Any other requirements established by the department.
(2) "Soft-story residential building" means a wood frame,
multiunit residential building constructed before January 1, 1978,
where the ground floor portion of the structure contains parking or
other similar open floor space that causes soft, weak, or open-front
wall lines.
(e) Loans made to the owners of soft-story residential buildings
pursuant to this section shall be for a term to be determined by the
department, but not more than 10 years. The loans shall bear simple
interest at the rate of 3 percent per annum on the unpaid principal
balance.
(f) (1) Except as provided in paragraph (2), any loan repayments
shall be retained by the qualifying city, county, or city and county
and reused for the purposes of this section.
(2) In the event that all of the soft-story residential buildings
identified by the city, county, or city and county pursuant to
Section 19161 have been retrofit, or in the event that the city,
county, or city and county has not made a loan pursuant to this
section within the previous three years, the city, county, or city
and county shall repay any unused portion of the grant and any future
loan repayments to the department. The department shall deposit any
repayments into the Soft-Story Housing Seismic Retrofit Fund for the
purposes of this section.
SEC. 2. Section 53545 of the Health and Safety
Code is amended to read:
53545. The Housing and Emergency Shelter Trust Fund of 2006 is
hereby created in the State Treasury. The Legislature intends that
the proceeds of bonds deposited in the fund shall be used to fund the
housing-related programs described in this chapter over the course
of the next decade. The proceeds of bonds issued and sold pursuant to
this part for the purposes specified in this chapter shall be
allocated in the following manner:
(a) (1) One billion five hundred million dollars ($1,500,000,000)
to be deposited in the Affordable Housing Account, which is hereby
created in the fund. Notwithstanding Section 13340 of the Government
Code, the money in the account shall be continuously appropriated in
accordance with the following schedule:
(A) (i) Three hundred forty-five million dollars ($345,000,000)
shall be transferred to the Housing Rehabilitation Loan Fund to be
expended for the Multifamily Housing Program authorized by Chapter
6.7 (commencing with Section 50675) of Part 2. The priorities
specified in Section 50675.13 shall apply to the expenditure of funds
pursuant to this clause.
(ii) Fifty million dollars ($50,000,000) shall be transferred to
the Housing Rehabilitation Loan Fund to be expended under the
Multifamily Housing Program authorized by Chapter 6.7 (commencing
with Section 50675) of Part 2 for housing meeting the definitions in
paragraphs (2) and (3) of subdivision (e) of Section 11139.3 of the
Government Code. The department may provide higher per-unit loan
limits as necessary to achieve affordable housing costs to the target
population. Any funds not encumbered for the purposes of this clause
by July 31, 2011, shall revert for general use in the Multifamily
Housing Program unless the department determines that funds should
revert sooner due to diminished demand.
(B) One hundred ninety-five million dollars ($195,000,000) shall
be transferred to the Housing Rehabilitation Loan Fund to be expended
for the Multifamily Housing Program authorized by Chapter 6.7
(commencing with Section 50675) of Part 2, to be used for supportive
housing for individuals and households moving from emergency shelters
or transitional housing or those at risk of homelessness. The
Department of Housing and Community Development shall provide for
higher per-unit loan limits as reasonably necessary to achieve
housing costs affordable to those individuals and households. For
purposes of this subparagraph, "supportive housing" means housing
with no limit on length of stay, that is occupied by the target
population, as defined in subdivision (d) of Section 53260, and that
is linked to onsite or offsite services that assist the tenant to
retain the housing, improve his or her health status, maximize his or
her ability to live, and, when possible, work in the community. The
criteria for selecting projects shall give priority to:
(i) Supportive housing for people with disabilities who would
otherwise be at high risk of homelessness where the applications
represent collaboration with programs that meet the needs of the
person's disabilities.
(ii) Projects that demonstrate funding commitments from local
governments for operating subsidies or services funding, or both, for
five years or longer.
(C) One hundred thirty-five million dollars ($135,000,000) shall
be transferred to the fund created by subdivision (b) of Section
50517.5 to be expended for the programs authorized by Chapter 3.2
(commencing with Section 50517.5) of Part 2.
(D) Three hundred million dollars ($300,000,000) shall be
transferred to the Self-Help Housing Fund created by Section 50697.1.
These funds shall be available to the Department of Housing and
Community Development, to be expended for the purposes of enabling
households to become or remain homeowners pursuant to the CalHome
Program authorized by Chapter 6 (commencing with Section 50650) of
Part 2, except ten million dollars ($10,000,000) shall be expended
for construction management under the California Self-Help Housing
Program pursuant to subdivision (b) of Section 50696.
(E) Two hundred million dollars ($200,000,000) shall be
transferred to the Self-Help Housing Fund created by Section 50697.1.
These funds shall be available to the California Housing Finance
Agency, to be expended for the purposes of the California Homebuyer's
Downpayment Assistance Program authorized by Chapter 11 (commencing
with Section 51500) of Part 3. Up to one hundred million dollars
($100,000,000) of these funds may be expended pursuant to subdivision
(b) of Section 51504.
(F) One hundred million dollars ($100,000,000) shall be
transferred to the Affordable Housing Innovation Fund, which is
hereby created in the State Treasury, to be administered by the
Department of Housing and Community Development. Funds shall be
expended for competitive grants or loans to sponsoring entities that
develop, own, lend, or invest in affordable housing and used to
create pilot programs to demonstrate innovative, cost-saving
approaches to creating or preserving affordable housing. Specific
criteria establishing eligibility for and use of the funds shall be
established in statute as approved by a 2/3 vote of each house of the
Legislature. Any funds not encumbered for the purposes set forth in
this subparagraph within 30 months of availability shall revert to
the Self-Help Housing Fund created by Section 50697.1 and shall be
available for the purposes described in subparagraph (D).
(G) One hundred twenty-five million dollars ($125,000,000) shall
be transferred to the Building Equity and Growth in Neighborhoods
Fund to be used for the Building Equity and Growth in Neighborhoods
(BEGIN) Program pursuant to Chapter 14.5 (commencing with Section
50860) of Part 1. Any funds not encumbered for the purposes set forth
in this subparagraph by November 17, 2011, shall revert for general
use in the CalHome Program unless the department determines that
funds should revert sooner due to diminished demand.
(H) Fifty million dollars ($50,000,000) shall be transferred to
the Emergency Housing and Assistance Fund to be distributed in the
form of capital development grants under the Emergency Housing and
Assistance Program authorized by Chapter 11.5 (commencing with
Section 50800) of Part 2 of Division 31. The funds shall be
administered by the Department of Housing and Community Development
in a manner consistent with the restrictions and authorizations
contained in Provision 3 of Item 2240-105-0001 of the Budget Act of
2000, except that any appropriations in that item shall not apply.
The competitive system used by the department shall incorporate
priorities set by the designated local boards and their input as to
the relative merits of submitted applications from within the
designated local board's county in relation to those priorities. In
addition, the funding limitations contained in this section shall not
apply to the appropriation in that budget item.
(2) The Legislature may, from time to time, amend the provisions
of law related to programs to which funds are, or have been,
allocated pursuant to this subdivision for the purpose of improving
the efficiency and effectiveness of the program, or for the purpose
of furthering the goals of the program.
(3) The Bureau of State Audits shall conduct periodic audits to
ensure that bond proceeds are awarded in a timely fashion and in a
manner consistent with the requirements of this subdivision, and that
awardees of bond proceeds are using funds in compliance with
applicable provisions of this subdivision. The first audit shall be
conducted no later than one year from voter approval of this part.
(4) In its annual report to the Legislature, the Department of
Housing and Community Development shall report how funds that were
made available pursuant to this subdivision and allocated in the
prior year were expended. The department shall make the report
available to the public on its Internet Web site.
(b) Eight hundred fifty million dollars ($850,000,000) shall be
deposited in the Regional Planning, Housing, and Infill Incentive
Account, which is hereby created in the fund. Funds in the account
shall be available, upon appropriation by the Legislature, and
subject to such other conditions and criteria as the Legislature may
provide in statute, for the following purposes:
(1) For infill incentive grants for capital outlay related to
infill housing development and other related infill development,
including, but not limited to, all of the following:
(A) No more than two hundred million dollars ($200,000,000) for
park creation, development, or rehabilitation to encourage infill
development.
(B) Water, sewer, or other public infrastructure costs associated
with infill development.
(C) Transportation improvements related to infill development
projects.
(D) Traffic mitigation.
(2) For brownfield cleanup that promotes infill housing
development and other related infill development consistent with
regional and local plans.
(c) Three hundred million dollars ($300,000,000) to be deposited
in the Transit-Oriented Development Account, which is hereby created
in the fund, for transfer to the Transit-Oriented Development
Implementation Fund, for expenditure, upon appropriation by the
Legislature, pursuant to the Transit-Oriented Development
Implementation Program authorized by Part 13 (commencing with Section
53560).
(d) Two hundred million dollars ($200,000,000) shall be deposited
as follows:
(1) One hundred fifty million dollars ($150,000,000) in the
Housing Urban-Suburban-and-Rural Parks Account, which is hereby
created in the fund. Funds in the account shall be available upon
appropriation by the Legislature for housing-related parks grants in
urban, suburban, and rural areas, subject to the conditions and
criteria that the Legislature may provide in statute.
(2) Fifty million dollars ($50,000,000) in the Soft-Story Housing
Seismic Retrofit Fund created by Section 50560 for purposes of that
section.
SEC. 3. SECTION 1. Section 70 of the
Revenue and Taxation Code is amended to read:
70. (a) "Newly constructed" and "new construction" means:
(1) Any addition to real property, whether land or improvements
(including fixtures), since the last lien date; and
(2) Any alteration of land or of any improvement (including
fixtures) since the last lien date that constitutes a major
rehabilitation thereof or that converts the property to a different
use.
(b) Any rehabilitation, renovation, or modernization that converts
an improvement or fixture to the substantial equivalent of a new
improvement or fixture is a major rehabilitation of that improvement
or fixture.
(c) Notwithstanding the provisions of subdivisions (a) and (b),
where real property has been damaged or destroyed by misfortune or
calamity, "newly constructed" and "new construction" do not mean any
timely reconstruction of the real property, or portion thereof, where
the property after reconstruction is substantially equivalent to the
property prior to damage or destruction. Any reconstruction of real
property, or portion thereof, that is not substantially equivalent to
the damaged or destroyed property, shall be deemed to be new
construction and only that portion that exceeds substantially
equivalent reconstruction shall have a new base year value determined
pursuant to Section 110.1.
(d) (1) Notwithstanding the provisions of subdivisions (a) and
(b), where a structure must be improved to comply with local
ordinances on seismic safety, "newly constructed" and "new
construction" do not mean the portion of reconstruction or
improvement to a structure, constructed of unreinforced masonry
bearing wall construction, necessary to comply with the local
ordinance. This exclusion shall remain in effect during the first 15
years following that reconstruction or improvement (unless the
property is purchased or changes ownership during that period, in
which case the provisions of Chapter 2 (commencing with Section 60)
of this division shall apply).
(2) In the sixteenth year following the reconstruction or
improvement referred to in paragraph (1), the assessor shall place on
the roll the current full cash value of the portion of
reconstruction or improvement to the structure that was excluded
pursuant to this subdivision.
(3) The governing body that enacted the local ordinance shall
issue a certificate of compliance upon the request of the owner who,
pursuant to a notice or permit issued by the governing body that
specified that the reconstruction or improvement is necessary to
comply with a seismic safety ordinance, so reconstructs or improves
his or her structure in accordance with the ordinance. The
certificate of compliance shall be filed by the property owner with
the county assessor not later than six months after the completion of
the project. The failure to file a certificate of completion within
the prescribed filing period shall be deemed a waiver of the
exclusion for that year.
(e) (1) Notwithstanding the provisions of subdivisions (a) and
(b), where a tank must be improved, upgraded, or replaced to comply
with federal, state, and local regulations on underground storage
tanks, "newly constructed" and "new construction" do not mean the
improvement, upgrade, or replacement of a tank to meet compliance
standards, and the improvement, upgrade, or replacement shall be
considered to have been performed for the purpose of normal
maintenance and repair.
(2) Notwithstanding the provisions of subdivisions (a) and (b),
where a structure, or any portion thereof, was reconstructed, as a
consequence of completing work on an underground storage tank to
comply with federal, state, and local regulations on these tanks,
timely reconstruction of the structure shall be considered to have
been performed for the purpose of normal maintenance and repair where
the structure, or portion thereof, after reconstruction is
substantially equivalent to the prior structure in size, utility, and
function.
(f) (1) Notwithstanding the provisions of subdivisions (a) and
(b), where a structure is improved pursuant to Section 50560 of the
Health and Safety Code, "newly constructed" and "new construction" do
not mean include the portion of
reconstruction or improvement to a soft-story building as
defined by subdivision (c) of Section 50560 of the Health and Safety
Code . This exclusion shall remain in effect during the
first 10 years following the reconstruction or improvement, unless
the property is purchased or changes ownership during that period, in
which case the provisions of Chapter 2 (commencing with Section 60)
shall apply.
(2) In the 11th year following the reconstruction or improvement
referred to in paragraph (1), the assessor shall place on the roll
the current full cash value of the portion of reconstruction or
improvement to the structure that was excluded pursuant to this
subdivision.
(3) For purposes of this section, "soft-story building" means a
wood frame, multiunit residential building constructed before January
1, 1978, where the ground floor portion of the structure contains
parking or other similar open floor space that causes soft, weak, or
open-front wall lines.
SEC. 4. SEC. 2. If the Commission on
State Mandates determines that this act contains costs mandated by
the state, reimbursement to local agencies and school districts for
those costs shall be made pursuant to Part 7 (commencing with Section
17500) of Division 4 of Title 2 of the Government Code.
SEC. 5. SEC. 3. Notwithstanding
Section 2229 of the Revenue and Taxation Code, no appropriation is
made by this act and the state shall not reimburse any local agency
for any property tax revenues lost by it pursuant to this act.
SEC. 6. SEC. 4. The provisions of
Section 3 of this act shall become inoperative if Senate
Constitutional Amendment 4 of the 2008-09 Regular Session is approved
by the voters at the June 8, 2010, statewide general election.