BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 251
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: T&H Com.
VERSION: 3/31/09
Analysis by: Mark Stivers FISCAL: No
Hearing date: April 14, 2009
SUBJECT:
2009 housing omnibus bill
DESCRIPTION:
This bill makes non-controversial changes to sections of law
relating to housing.
ANALYSIS:
According to the Legislative Analyst, the cost of producing a
bill in 2001-02 was $17,890. By combining multiple matters into
one bill, the Legislature can make minor changes to law in the
most cost-effective manner.
This committee has adopted a committee policy regarding
committee omnibus bills. The policy requires that:
The proponent of an item provide sufficient background
material to the committee for the item to be described to
other legislative staff and stakeholders;
The committee staff provide a summary of the item and the
actual legislative language to all relevant majority and
minority consultants in both the Senate and Assembly and to
known or presumed interested parties prior to including an
item within the omnibus committee bill; and
The item be omitted from or amended out of the bill if it
encounters any opposition and the proponent cannot work out a
solution with the opposition.
This bill includes the following provisions. The sponsor of
each provision is noted in brackets.
1.Clarifying the timeline for HCD to review a COG's RHNA
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allocation plan. [Section 1] Under current housing element
law, councils of governments (COGs) allocate the regional
housing need assessment (RHNA) among cities and counties
within their respective regions. The Department of Housing
and Community Development (HCD) has 60 days from the date of
adoption by a COG to review a RHNA plan. The law does not
require the COGs to submit their adopted plans in a timely
manner, however. On a number of occasions, HCD has received a
plan for review very close to the end of the 60-day period,
leaving very little time for a thorough review to be conducted
within the statutory timeframe. The proposed amendment
requires COG to immediately transmit its RHNA plan to HCD upon
adoption and gives HCD 60 days from the date an adopted RHNA
plan is received from a COG to review the plan for consistency
with applicable law. [Deborah Spurgeon, HCD]
2.Conversion of community apartments and stock cooperatives.
[Section 2] The Subdivision Map Act currently contains
exemptions for certain conversions of community apartments and
cooperatives to condominiums. Under these exemptions, at
least 75 percent of the units in a community apartment project
must have been occupied by record owners of the project on
March 31, 1982, and at least 51 percent of the units in a
stock cooperative must have been occupied by stockholders of
the corporation on January 1, 1981. It can be very difficult
to prove owner occupancy from that long ago, and at times it
is impossible because the records are simply no longer
available. The bill alters the exemptions by replacing the
requirements to show owner occupancy with requirements to show
that no single owner controlled more than 49% of the units on
the relevant date. The bill also makes technical changes to
the statute. [Tim Murakami, Murakami Law Office]
3.Correct a drafting error relating to the strapping of water
heaters in manufactured housing. [Section 3] AB 2050
(Garcia), Chapter 737, Statutes of 2008, requires that all
fuel-gas-burning water heaters in mobilehomes and manufactured
homes be seismically braced, anchored, or strapped. The
language of the bill assumes that each owner will "complete
the work" when, in fact, subsequent owners will rely on work
done previously if proper. The bill deletes the reference to
"complet[ing] the work" and instead relies solely on current
law's requirement that the homeowner or contract sign a
declaration that the water heater is secured as required.
[Mark Stivers, Senate Transportation and Housing Committee]
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4.Local Housing Trust Fund Program. [Section 3.5] Under the
Local Housing Trust Fund Matching Grant (LHTF) Program, HCD
matches, up to a certain level, contributions of non-housing
funds to a housing trust fund created by a local government or
non-profit organization. Proposition 1C allocated $100
million to the Affordable Housing Innovation Fund (AHIF), and
SB 586 (Dutton), Chapter 652, Statutes of 2007, later
allocated $35 million of AHIF funds to the LHTF Program. SB
586 further required that HCD set aside some level of funding
for a period of 36 months from the date funds are first made
available for newly established housing trust funds in
counties with populations of less than 425,000 persons. The
bond itself, however, required that any funds in the AHIF not
encumbered within 30 months roll over to HCD's CalHome
Program, making it legally impossible for HCD to meet the
36-month setaside requirement for small counties. The
proposed amendment allows HCD to encumber funds set aside for
newly established housing trust funds up to 42 months from
availability and to make disbursements of such funds up to 48
months from availability. Thereafter, unused funds would
revert to the CalHome Program. The 42-month expenditure
period gives HCD six months to review applications, issue
award letters, and prepare contracts after the final date for
accepting applications. Assuming an LHTF were given an award
letter at the end of the proposed 42 month encumbrance
deadline, the 48- month liquidation deadline would give an
award recipient six months to confirm projects for which HCD
would issue warrants for the funds. [Deborah Spurgeon, HCD].
5.Correct a drafting error related to Chapter 8 tax sales.
[Section 4] Current law allows for the direct sale of a
non-owner occupied tax delinquent property to a non-profit
organization for the purpose of providing affordable housing
to low-income families. The law requires that the housing
thereafter be affordable for at least 30 years or subject to a
subsidy recapture and equity sharing restriction. The law
defines the subsidy to be recaptured as the fair market value
minus the sale price to the low-income family but mistakenly
refers to the fair market value of the home at the time it was
purchased by the non-profit, as opposed to the time it was
purchased by the low-income owner occupant. The bill corrects
this mistake by referring to the fair market value at the time
of sale to the low-income owner occupant. [Mark Stivers,
Senate Transportation and Housing Committee]
6.Correct a cross reference relating to low-income housing tax
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credits. [Sections 5, 6, and 7] SB 585 (Lowenthal), Chapter
382, Statutes of 2008, allows for the bifurcation of state and
federal low-income housing tax credits. SB 1247 (Lowenthal),
Chapter 521, Statutes of 2008, moves the farmworker housing
tax credit program into the low-income housing tax credit
program as a farmworker setaside. Because farmworker credits,
unlike standard state low-income housing credits, are not
necessarily coupled with federal low-income housing credits,
language was inserted into both bills that prohibits the
bifurcation of farmworker credits unless they are coupled with
federal low-income housing credits. This prohibition is in
the Revenue and Taxation Code, but where the language
cross-references the farmworker setaside, it fails to
recognize that the setaside is in the Health and Safety Code.
The bill correctly refers to the farmworker setaside in the
Health and Safety Code. [Mark Stivers, Senate Transportation
and Housing Committee]
COMMENTS:
1.Purpose of the bill . The Senate Transportation and Housing
Committee is authoring this bill as a means of combining
multiple, non-controversial changes to statutes into one bill,
so that the Legislature can make minor amendments in a
cost-effective manner. There is no known opposition to any
item in the bill, and if concerns arise that cannot be
resolved, the provision of concern will be deleted from the
bill.
2.Furthering the purposes of Proposition 1C . Proposition 1C of
2006 included a provision allowing the Legislature to amend
laws governing programs funded in the bond "for the purpose of
improving the efficiency and effectiveness of the program, or
for the purpose of furthering the goals of the program." To
the extent that the section of this bill relating to the LHTF
Program actually allows for the small-county setaside to be
implemented, this bill clearly furthers the goals of that
program.
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
April 8, 2009)
SUPPORT: None received.
OPPOSED: None received.
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