Bill Text: CA AB1109 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Emergency housing and assistance.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Passed) 2013-10-02 - Chaptered by Secretary of State - Chapter 495, Statutes of 2013. [AB1109 Detail]

Download: California-2013-AB1109-Amended.html

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BILL NUMBER: AB 1109	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 21, 2013

INTRODUCED BY   Assembly Member Bonilla

                        FEBRUARY 22, 2013

   An act to amend Section  50515.2   50802
 of the Health and Safety Code, relating to housing  , and
making an appropriation therefor  .



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1109, as amended, Bonilla.  Affordable housing.
  Emergency housing and assistance.  
   Existing law requires the Department of Housing and Community
Development to administer the Emergency Housing and Assistance
Program. Under the program, moneys from the continuously appropriated
Emergency Housing and Assistance Fund are available for the purposes
of providing shelter, as specified, to homeless persons at as low a
cost and as quickly as possible, without compromising the health and
safety of shelter occupants, to encourage the move of homeless
persons from shelters to a self-supporting environment as soon as
possible, to encourage provision of services for as many persons at
risk of homelessness as possible, to encourage compatible and
effective funding of homeless services, and to encourage coordination
among public agencies that fund or provide services to homeless
individuals, as well as agencies that discharge people from their
institutions.  
   Existing law requires the department to distribute funds
appropriated for activities providing for capital development
programs, including acquisition, leasing, construction, and
rehabilitation of sites for emergency shelter and transitional
housing for homeless persons, as grants in the form of forgivable
deferred loans, as prescribed. Existing law requires the department
to terminate the grant and require the repayment of the deferred loan
in full, if a transfer or conveyance of the project property that
results in the property no longer being used as an emergency shelter
or transitional housing occurs before the term of the loan expires.
 
   This bill would provide that when property is transitioned from an
emergency shelter or transitional housing to permanent affordable
housing, as specified, and serves people who are homeless or at risk
of homelessness, an existing loan may be deferred and forgiven, as if
the property had remained an emergency shelter or transitional
housing. By authorizing the use of continuously appropriated funds
for a new purpose, this bill would make an appropriation. 

   Existing law authorizes the Department of Housing and Community
Development to provide technical assistance to groups and persons
with various housing needs and to administer various housing loan
programs, including the Joe Serna, Jr. Farmworker Housing Grant
Program.  
   This bill would make technical, nonsubstantive changes to a
provision of the Joe Serna, Jr. Farmworker Housing Grant Program.

   Vote:  majority  2/3  . Appropriation:
 no   yes  . Fiscal committee:  no
  yes  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 50802 of the   Health
and Safety Code   is amended to read: 
   50802.  (a) The department shall ensure that not less than 20
percent of the moneys in the Emergency Housing and Assistance Fund
shall be allocated to nonurban counties during any given fiscal year.
If the funds designated for facilities operation that are allocated
to nonurban counties are not awarded by the end of that fiscal year,
then those unencumbered funds shall be allocated in the next fiscal
year to urban counties. Funds for capital development that are not
awarded by the end of the second fiscal year shall be awarded in the
subsequent fiscal year to urban counties.
   (b) The amount of funds that the department allocates from the
Emergency Housing and Assistance Fund to each region, excluding funds
allocated pursuant to subdivision (a), shall be based upon a formula
that accords at least 20 percent weight to each of the following
factors:
   (1) The relative number of persons in the region below the poverty
line according to the most recent federal census, updated, if
possible, with an estimate by the Department of Finance, compared to
the total of the urban counties.
   (2) The relative number of persons unemployed within each region,
based on the most recent one-year period for which data is available,
compared to the total of the urban counties.
   (c) Grant funds shall be disbursed as expeditiously as possible by
the department.
   (d) The department shall use not more than 5 percent of the amount
available for funds pursuant to this chapter to defray the
department's administrative costs pursuant to this chapter.
   (e) Notwithstanding any other provision of this chapter, the
department shall distribute funds appropriated for purposes of the
activities specified in paragraph (2) of subdivision (a) of Section
50803 as grants in the form of forgivable deferred loans, subject to
all of the following:
   (1)  (A)    Funding shall be made available to
each project as a loan with a term of five years for rehabilitation,
seven years for substantial rehabilitation, or 10 years for
acquisition and rehabilitation or new construction. Each deferred
loan shall be secured by a deed of trust and promissory note.
Repayment of the loan shall be deferred as long as the project is
used as an emergency shelter or transitional housing. At the
completion of the specified year term, the loan shall be forgiven. If
a transfer or conveyance of the project property, however, occurs
prior to that time that results in the property no longer being used
as an emergency shelter or transitional housing, the department shall
terminate the grant and require the repayment of the deferred loan
in full. 
   (B) If the property is transitioned from an emergency shelter or
transitional housing to permanent affordable housing, including, but
not limited to, permanent supportive housing and rapid rehousing, and
serves people who are homeless or at risk of homelessness, the loan
may also be deferred and forgiven according to subparagraph (A), as
if it had remained an emergency shelter or transitional housing.
 
   (i) For purposes of this subparagraph, "permanent supportive
housing" has the same meaning as the term "supportive housing," as
defined in paragraph (2) of subdivision (b) of Section 50675.14.
 
   (ii) For purposes of this subparagraph, "rapid rehousing" means
housing that focuses on moving homeless individuals and families into
appropriate housing as quickly as possible.  
   (iii) For purposes of this subparagraph, "people who are homeless"
includes individuals described in Section 11302 of Title 42 of the
United States Code, and paragraph (2) of subdivision (e) of Section
11139.3 of the Government Code. 
   (2) Applications for funding shall be made pursuant to
department-issued statewide "Notices of Funding Availability" without
the need for additional regulations.
   (3) The department shall set forth the criteria for evaluating
applications in the "Notices of Funding Availability" and shall make
deferred loans based on those applications that best meet the
criteria.
   (4) The department shall specify in the "Notice of Funding
Availability" both maximum and minimum grant amounts that may be
varied for urban and nonurban counties.
   (5) Contracts for projects that have not begun construction within
the initial 12-month period shall be terminated and funds
reallocated. The department, however, may extend this period by a
period not to exceed 12 months. 
  SECTION 1.    Section 50515.2 of the Health and
Safety Code is amended to read:
   50515.2.  (a) Notwithstanding any other law, the department may
extend the term of an existing multifamily housing loan made by the
department under the original Rental Housing Construction Program
established by Chapter 9 (commencing with Section 50735), the Special
User Housing Rehabilitation Program established by Section 50670, or
the Deferred Payment Rehabilitation Loan Program established by
Chapter 6.5 (commencing with Section 50660) upon the request of any
borrower subject to the following conditions:
   (1) The borrower shall provide to the department a complete report
showing all existing tenants, their incomes, as reported in the most
recent annual income certification, and the rents currently charged
to each tenant.
   (2) The borrower shall agree to an extension of the term of the
loan by an additional 55 years from the date of departmental
approval. If the department determines that the remaining useful life
of a project is less than 55 years, the loan may be extended for the
remaining useful life of the project, but not less than 30 years.
The department may convert the existing outstanding principal and any
accrued interest into the new loan amount. The interest rate on the
extended term shall be 3 percent simple interest. All future payments
of principal and interest may be deferred except for a percentage of
interest equal to the percentage charged in the Multifamily Housing
Program (Chapter 6.7 (commencing with Section 50675)) for the
department's ongoing monitoring and management responsibilities.
   (3) The borrower shall agree to amend or replace the existing
regulatory agreement to include terms generally equivalent to those
used in the Multifamily Housing Program. In addition, the borrower
shall agree to replace, amend, or revise any other loan document as
necessary to accomplish the purposes of this section.
   (4) (A) The borrower shall agree to a rent schedule that ensures
that all assisted units are affordable to households earning no more
than 60 percent of the area median income and that at least 35
percent of all assisted units shall be reserved for, affordable to,
and occupied by, households earning less than or equal to the
midlevel target used by the Multifamily Housing Program, unless the
department finds both of the following:
   (i) That the project income is insufficient to maintain fiscal
integrity, as that term is used in the Multifamily Housing Program,
and is insufficient to maintain the rents required under this
subparagraph pursuant to the terms of the Uniform Multifamily
Regulations, or any successor regulations, except that commercial
vacancy loss shall be projected based on the operating history of the
project, commercial vacancy rates in the neighborhood, and similar
factors typically used by commercial lenders.
   (ii) That the borrower has exhausted all available potential
sources of rental subsidies, including, but not limited to, federal,
state, and local funds.
   (B) If the department finds that a reduction in the percentage of
assisted units to less than 35 percent of assisted units is
justified, it shall ensure that the largest possible percentage is
reserved for the targeted households.
   (C) For the purposes of this paragraph, "midlevel target used by
the Multifamily Housing Program" means the following:
   (i) For counties with an area median income of 110 percent or less
of the state median income, households earning 30 percent of state
median income, expressed as a percentage of area median income.
   (ii) For counties with an area median income that exceeds 110
percent of the state median income, households earning less than 35
percent of state median income, expressed as a percentage of area
median income.
   (5) A tenant residing in a project at the time of an extension
authorized by this section may not be displaced as a result of the
regulatory revisions authorized by this section, and, for the initial
operating year after approval of the extension, that tenant may not
have his or her rent increased above the amounts specified in his or
her preexisting regulatory agreements, except that no tenant may pay
less than 30 percent of his or her income, calculated pursuant to the
Multifamily Housing Program criteria. If a rent increase authorized
under this section would exceed a 10 percent increase in payment for
a lower income tenant, the project owner shall phase in the increase
so that it does not exceed 10 percent per year. After the initial
operating year after the extension authorized under this section, the
rents for all regulated units that are subject to the new agreement
may be adjusted in the percentage calculated pursuant to the
Multifamily Housing Program criteria, plus the amount necessary to
bring an individual tenant up to the 30-percent-of-income standard,
provided that the total annual increase does not exceed 10 percent.
Rent adjustments for all tenants occupying assisted units at the time
of the extension shall be based on the tenant's initial rent
established under this paragraph. Upon vacancy of an assisted unit
occupied at the time of the extension, the new base rent for that
unit shall be established consistent with the standards used in the
Multifamily Housing Program for the regulated income band, subject to
the reservation of units required under paragraph (4).
   (b) The department may approve an extension of a loan made by the
department if it determines that the project has, or will have, after
rehabilitation or repairs, a potential remaining useful life of at
least 30 years and that the project is deemed financially feasible
pursuant to the terms of its Uniform Multifamily Regulations or
successor regulations.
   (c) The department may subordinate its loan or loans to refinance
existing senior debt and to additional permanent financing if that
additional senior debt is used only for rehabilitation, repairs, or
improvements, or both, including related soft costs, that are modest
in size, scope, and cost, as determined by the department and
necessary to maintain and extend the useful life of the project.
   (d) (1) For the purposes of this subdivision, the "agency projects"
are the 26 projects assisted through the original Rental Housing
Construction Program with funds administered by the California
Housing Finance Agency.
   (2) Upon the request of a borrower the agency may extend the term
of an existing loan for an agency project by a period that is equal
to the remaining useful life of the project, as determined by the
agency, but not more than 55 years and not less than 30 years from
the date of agency approval, under terms that are substantially
consistent with the purposes of this section, if all of the following
conditions are met:
   (A) The borrower shall provide to the agency the report described
in paragraph (1) of subdivision (a).
   (B) The extension shall be subject to the conditions set forth in
paragraph (2) of subdivision (a).
   (C) The rent levels and tenant protections described in paragraphs
(4) and (5) of subdivision (a) shall be satisfied, except that the
agency, not the department, shall make the determination required
under clause (i) of subparagraph (A) of paragraph (4) of subdivision
(a) that the project income is insufficient to meet the agency's
affordable multifamily lending program requirements.
   (3) Any determination or approval under this section regarding the
agency projects shall be by the agency rather than the department.
   (4) The borrower and the agency shall amend, replace, or revise
any other loan documents or agreements governing the loans for the
agency projects as necessary to accomplish the purposes of this
section.
   (5) All funds received by the agency for the agency projects,
whether by loan repayment, foreclosure, accrued interest, or
otherwise, shall be used to provide assistance to existing or future
projects financed by or through the agency pursuant to terms
consistent with the agency's affordable multifamily lending programs.

   (e) It is the intent of the Legislature in enacting this section
that the department should manage its reserves for the original
Rental Housing Construction Program in a manner that will allow for
the continuation of current benefits to current low-income tenants
for the longest period of time possible. Accordingly, rent subsidies
shall be continued only for units occupied by lower income tenants
who were in residence at the time of the extension authorized under
this section.
   (f) It is the intent of the Legislature in enacting this section
to provide to the department the flexibility necessary to preserve
the affordable rental units for which the state has already made a
significant public investment. Accordingly, the department may
implement this section through guidelines that shall not be subject
to Chapter 2.5 (commencing with Section 11340) of Part 1 of Title 2
of the Government Code.
   (g) This section shall become operative on July 1, 2008.
   (h) This section shall not apply to loan extensions and senior
debt subordinations executed by the department and recorded after the
effective date of the guidelines adopted by the department pursuant
to subdivision (h) of Section 50560.