BILL ANALYSIS Ó
AB 232
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Date of Hearing: January 19, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 232 (V. Manuel Perez) - As Amended: January 4, 2012
Policy Committee: JEDE Vote:6-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill eliminates the requirement that small cities seeking
funds under the federal Community Development Block Grant
Program (CDBG) must create or retain a job for every $35,000
dollar in grants.
FISCAL EFFECT
Minor and absorbable costs to the Department of Housing and
Community Development (HCD).
COMMENTS
1)Purpose : According to the author, this bill will provide
flexibility to the small cities portion of the federal CDBG
Program and would allow CDBG grant money to be disbursed more
quickly to local economic development projects. Under the
federal guidelines, states are required to certify that
economic development projects funded through the Small Cities
program generate a sufficient public benefit. Federal
guidelines afford states several options for certifying public
benefit, ranging from the number of jobs created per
investment to the level of goods and services generated for
persons of low and moderate incomes.
In California, however, the state chose to avail itself of
only one of the options afforded under federal law for
certifying public benefit. This measure removes the more
limited requirement from the statute, allowing HCD the
flexibility to more quickly certify and award funding for
economic development projects across the state.
2)Community Development Block Grant Program . The CDBG Program
AB 232
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was established by federal law in 1974. Large and medium
sized municipalities receive allocations from the federal
Housing and Urban Development Department. States administer
allocations for the CDBG program for smaller cities and
counties on a competitive basis. California's small cities
CDBG program administered by HCD provides funding to counties
with fewer than 200,000 residents in unincorporated areas and
cities with fewer than 50,000 residents that are not
participants in the federal CDBG Program.
3) Related legislation.
a) AB 1556, 2010, (Assembly Committee on Jobs, Economic
Development and the Economy), would have required CDBG
grantees to contract with approved financial
intermediaries. AB 1556 was held in this committee.
b) SB 194, 2010, (Florez), would have provided that unless
prohibited by federal regulations, local governments must
include representation from disadvantaged unincorporated
communities in their Citizen Advisory Committee. This bill
was vetoed by Governor Schwarzenegger.
4)There is no registered opposition to this bill.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081