BILL ANALYSIS �
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UNFINISHED BUSINESS
Bill No: SB 562
Author: Senate Transportation and Housing Committee
Amended: 6/20/11
Vote: 21
SENATE TRANSPORTATION & HOUSING COMMITTEE : 9-0, 4/12/11
AYES: DeSaulnier, Gaines, Harman, Huff, Kehoe, Lowenthal,
Pavley, Rubio, Simitian
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 40-0, 5/9/11
AYES: Alquist, Anderson, Berryhill, Blakeslee, Calderon,
Cannella, Corbett, Correa, De Le�n, DeSaulnier, Dutton,
Emmerson, Evans, Fuller, Gaines, Hancock, Harman,
Hernandez, Huff, Kehoe, La Malfa, Leno, Lieu, Liu,
Lowenthal, Negrete McLeod, Padilla, Pavley, Price, Rubio,
Runner, Simitian, Steinberg, Strickland, Vargas, Walters,
Wolk, Wright, Wyland, Yee
ASSEMBLY FLOOR : 74-0, 8/18/11 (Consent) - See last page
for vote
SUBJECT : Transportation and Housing Committee omnibus
bill of 2011
SOURCE : Author
DIGEST : This bill makes non-controversial changes to
sections of law relating to housing.
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Assembly Amendments add a reference to Part 11(Green Code)
of the California Building Standards Code in existing law
which requires the Department of Housing and Community
Development (HCD) to adopt regulations for the
construction, alteration, or conversion of commercial
modulars, and add provisions to the bill related to
extending the terms for existing HCD loans.
ANALYSIS : This bill includes the following provisions:
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
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returned if 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
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about the relevant penalties. Current statute contains
an incorrect cross-reference to the existing penalty
section. This bill corrects this cross-reference.
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), Chapter 658, Statutes of
2007, allowes 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 California Tax Credit Allocation
Committee (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.
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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.
Comments
Purpose of this 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 this bill, and if concerns arise
that cannot be resolved, the provision of concern will be
deleted from this bill.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/18/11)
American Federation of State, County and Municipal
Employees
ASSEMBLY FLOOR : 74-0, 8/18/11 (Consent)
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bradford, Brownley,
Buchanan, Butler, Charles Calderon, Campos, Carter,
Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng,
Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines,
Galgiani, Garrick, Gatto, Gordon, Grove, Hagman,
Halderman, Hall, Harkey, Hayashi, Roger Hern�ndez, Huber,
Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue,
Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel P�rez, Portantino, Silva, Skinner,
Smyth, Solorio, Swanson, Wagner, Wieckowski, Williams,
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Yamada, John A. P�rez
NO VOTE RECORDED: Bonilla, Cedillo, Gorell, Hill, Torres,
Valadao
JJA:kc 8/18/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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