BILL ANALYSIS                                                                                                                                                                                                    




          Appropriations Committee Fiscal Summary

                                SB 633  (Sher)

Hearing Date:5/27/99            Amended:4/12/99        
Consultant: Maureen Brooks          Policy Vote:H.C.D.  4-1
____________________________________________________________ 

BILL SUMMARY:   SB 633 appropriates $5 million to the  
Emergency Housing and Assistance Fund for loans for the  
acquisition, conversion, rehabilitation or construction of  
permanent homeless shelter facilities.

                         Fiscal Impact (in thousands)
  
Major Provisions             1999-2000       2000-01       2001-02    Fund  

Emergency Housing   $5,000                        General

STAFF COMMENTS:  SUSPENSE FILE.

The Department of Housing and Community Development (HCD)  
administers the program.  The 1998/99 Budget appropriated  
$2 million for distribution to local governments for  
homeless shelters.  Some counties used the money to pay for  
the use of National Guard armories.  SB 633 provides that  
these loans must be used in obtaining  permanent  homeless  
shelters.  The 1999/2000 Governor's Budget augments $1  
million to the California National Guard to continue use of  
the armories for winter shelter.

The specifications of the loan include a term of 20 years,   
requirements that the loan must be secured by a deed and an  
interest rate of 3%.  Repayment of principal and interest  
is deferred as long as the project is used as an emergency  
shelter.  At the completion of the 20 year term, both  
principal and interest shall be forgiven.  Loan amounts  
will range from $100,000 to $1 million.

Under the provisions of SB 633, HCD will set forth the  
criteria used in evaluating applications giving priority to  
projects that replace programs which have been operating in  
National Guard armories.  SB 633 requires a 1-1 match in  
urban areas and a 1-3 match for projects in nonurban areas.  
 HCD must limit administration costs to 6% of the funds.











It is the authors intent that permanent shelters are  
constructed which will enable mental health and vocational  
programs to be provided.  This bill is similar to 
SB 1950 (Sher) which was vetoed by the Governor last year.