BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           326 (Strickland)
          
          Hearing Date:  05/18/2009           Amended: 04/13/2009
          Consultant: Mark McKenzie       Policy Vote: T&H 10-0
          _________________________________________________________________ 
          ____
          BILL SUMMARY:   SB 326 would require the housing element to  
          include a calculation of a locality's existing and projected  
          foreclosure rate and its impact on housing needs.
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2009-10      2010-11       2011-12     Fund
           HCD review             No new costs to ensure compliance.General
          Mandate                Unknown, moderate costs to local Local/
                                 governments.  Unlikely to be  
          reimbursable.             General
          _________________________________________________________________ 
          ____

          STAFF COMMENTS:  The Planning and Zoning Law requires cities and  
          counties to prepare and adopt a general plan, including a  
          housing element to guide the future growth of a community.  A  
          housing element must identify and analyze existing and projected  
          housing needs, identify adequate sites with appropriate zoning  
          to meet its fair share of the regional housing need, and ensure  
          that regulatory systems provide opportunities for, and do not  
          unduly constrain, housing development.  The Department of  
          Housing and Community Development reviews both draft and adopted  
          housing elements to determine whether or not they are in  
          substantial compliance with the law.

          SB 326 would require cities and counties to include within the  
          housing needs assessment portion of their housing elements a  
          quantification of their existing and projected foreclosure rates  
          and an analysis of the impact on housing needs.

          Legislative Counsel has keyed SB 326 as a state-mandated local  
          program.  Recent decisions by the Commission on State Mandates  
          (COSM), however, indicate that it is unlikely that local  
          governments would succeed in filing a test claim for  
          reimbursement for the higher level of service imposed by this  










          bill.  In 2005, the COSM reversed previous decisions that had  
          provided for reimbursement to local governments and councils of  
          government (COGs) for the "Regional Housing Needs Determination"  
          mandate (Statutes of 1980, Chapter 1143).  On reconsideration of  
          the previous decisions, the COSM determined, in light of  
          statutes enacted and court decisions rendered since 1980, that  
          previously approved test claims are not reimbursable because  
          cities, counties, and COGs have fee authority for this program,  
          citing Government Code Sections 65104, which authorizes local  
          entities to establish fees to support the work of the planning  
          agency, and 65584.1, which allows a city or county to charge a  
          fee to recover costs incurred by a COG in distributing regional  
          housing needs.  In light of these decisions, staff notes that  
          the COSM would probably not approve a claim for reimbursement  
          related to SB 326 because local entities have the authority to  
          charge fees for planning costs, including costs associated with  
          housing element requirements.  If a successful claim were filed,  
          however, costs would likely be relatively minor for each agency  
          to comply with the requirements of this bill.