BILL ANALYSIS �
SB 562
Page 1
Date of Hearing: June 29, 2011
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Norma Torres, Chair
SB 562 (Transportation and Housing Committee) - As Amended:
June 20, 2011
SENATE VOTE : 40-0
SUBJECT : Housing omnibus bill.
SUMMARY : Makes technical and non-controversial changes to
various sections of law relating to housing. Specifically, this
bill :
1)CDLAC cleanup �Section 1] . The California Debt Limit
Allocation Committee (CDLAC) administers the tax-exempt
private activity bond program for the state. Current law
states that if a bond issuer that received a private activity
bond allocation from CDLAC ultimately issues bonds in an
amount less than what was awarded by CDLAC, then a
proportional share of a performance deposit held for that
issuance shall be forfeited to CDLAC. The intent of the
performance deposit is to insure that bond issuers make use of
the limitedly available private activity bond allocation
awarded to them for a given project or program. The reality of
project finance is that the funding sources are often in flux
up to the day of bond issuance, so bond issuers will often
apply to CDLAC for an allocation amount slightly above what
they believe at the time they may eventually need. This
slight difference is the industry norm and reduces the need
for the bond issuer to reapply to CDLAC for small amounts of
additional allocation if needed. Historically, CDLAC's policy
has been that if the issuance amount was at least 80 percent
of the awarded allocation amount, then no portion of the
performance deposit would be forfeited. This bill revises
statute to reflect this past CDLAC practice.
CDLAC also seeks to clarify its option to waive the forfeiture
of the performance deposit when some portion of the bonds has
been issued if the committee determines there is good cause to
do so. Existing statute only provides for this discretion when
none of the bonds have been issued. This creates a situation
where an applicant may be able to have its performance deposit
returned if no bonds are issued but cannot have it returned if
SB 562
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a portion of the bonds are issued. This bill provides CDLAC
with the ability to return the deposit when less than 100
percent of the allocation amount is issued but not when no
bonds are issued.
2)Reference to Green Code �Section 2] .Current law requires HCD
to adopt regulations for the construction, alteration, or
conversion of commercial modulars based on specific parts of
the California Building Standards Code (CBSC). This bill adds
a reference to Part 11 of the CBSC in the section of law
regarding standards for commercial modular. Part 11 is the
newly adopted Green Code, which was not yet in existence when
this section of law was originally enacted.
3)Manufactured Home Recovery Fund �Section 3] . Legislative
amendments in 2004 expanded the ability of aggrieved buyers
and sellers of manufactured homes to file claims and
simplified some processes. The current economy has created
additional purchase and sales problems. Currently, there is
roughly $800,000 in the Manufactured Home Recovery Fund but
roughly the same amount of pending claims. When the fund runs
low on cash, it reduces the timeliness of potential payments
when claims are found to be valid and has a spiraling effect
on even later claims. Current law that has been in place for
30 years, however, allows for a reduction in the fee whenever
the balance exceeds $1 million. This bill increases the
threshold at which fees may be reduced from $1 million to $2
million.
4)Mobilehome Parks Act cleanup �Sections 4, 5, 6, and 7] . The
Mobilehome Parks Act governs health and safety issues in
mobilehome parks. The act includes the term "commercial
coach," an outdated term that is no longer used. The modern
term is commercial modular. This bill updates the definitions
in the act to reflect this modern term. The bill additionally
fixes an incorrect statutory cross-reference.
5)Special Occupancy Parks Act cross reference �Section 8] .
Current law makes various violations of the Special Occupancy
Parks Act a misdemeanor. When issuing a citation, an
enforcement agency must include a statement about the relevant
penalties. Current statute contains an incorrect
cross-reference to the existing penalty section. This bill
corrects this cross-reference.
SB 562
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6)Repeal outdated statute on Redding Veterans' Home �Section 9] .
Current law allows redevelopment agencies in Shasta County to
borrow and use up to $2,300,000 from their Low and Moderate
Income Housing Funds to provide financial assistance for the
acquisition of property for a veterans' home in the City of
Redding. This land has been purchased with non-redevelopment
funds and the home is currently under construction. This
section is no longer needed. This bill repeals this obsolete
section of law.
7)Seismic Safety Retrofits �Section 10] . Current law dealing
with seismic safety retrofit rehabilitation or alternations
relies on building code references no longer adopted in
California. This bill updates the requirements to refer to
current building codes in use in California.
8)Extension terms for existing HCD loans �Sections 11, 12, and
13] . SB 707 (Ducheny) of 2007 allowed HCD to extend existing
loans in increments of 10 years. A small portion of the HCD
portfolio requires rehabilitation, and these rehabilitations
are being done using new financing, tax credits, and local
funds. While HCD is not putting any new money into the
project, it gets a project that is greatly improved and in a
much better position to meet the regulatory obligations from
HCD and other financing participants.
Other lenders and TCAC are regulating these properties for a
new 55-year term. In order to attract a tax credit investor,
the developer needs to show that the soft loans (including
HCD) are repayable when due. If HCD's loan is due in 47 years,
however, and there is a 55-year TCAC regulatory agreement,
then the ability to refinance is in doubt. This bill gives
HCD the flexibility to extend the term of the loans to 55
years rather than in a 10-year increment that doesn't match
the term of other regulatory periods.
9)Strong Motion Instrumentation Fee cleanup �Sections 14 and
15] . Current law requires each applicant for a building
permit to pay a minimal fee (1/100th or 2/100th of a percent
of the value of the work) to support earthquake mapping work.
Two separate sections of law require that these fee revenues
be deposited into the Strong-Motion Instrumentation and
Seismic Hazards Mapping Fund. This bill combines these two
repetitive sections into one.
SB 562
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EXISTING LAW includes numerous provisions related to housing.
FISCAL EFFECT : Unknown
COMMENTS :
The Senate Transportation and Housing Committee is authoring
this year's housing omnibus bill as a cost-effective way of
making a number of minor, non-controversial changes to statute
at one time. There is no known opposition to any of the items
in the bill. If issues arise that cannot be resolved, the
provision of concern will be deleted from the bill.
REGISTERED SUPPORT / OPPOSITION :
Support
State Treasurer Bill Lockyer
AFSCME
Opposition
None on file
Analysis Prepared by : Anya Lawler / H. & C.D. / (916)
319-2085