Bill Text: CA AB2043 | 2009-2010 | Regular Session | Amended
Bill Title: Redevelopment funds: mortgage assistance.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-05-28 - In committee: Set, second hearing. Held under submission. [AB2043 Detail]
Download: California-2009-AB2043-Amended.html
BILL NUMBER: AB 2043 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 29, 2010
AMENDED IN ASSEMBLY APRIL 19, 2010
INTRODUCED BY Assembly Member Torrico
FEBRUARY 17, 2010
An act to amend Sections 33020 and 33021 of, and to add and repeal
Section 33137 of, the Health and Safety Code, relating to
redevelopment.
LEGISLATIVE COUNSEL'S DIGEST
AB 2043, as amended, Torrico. Redevelopment funds: mortgage
assistance.
The Community Redevelopment Law authorizes the establishment of
redevelopment agencies in communities in order to
address the effects of blight, as defined, in those communities and
requires those agencies to prepare, or cause to be prepared, and
approve a redevelopment plan for each project area. That law
authorizes the agencies to use tax increment financing for
redevelopment projects and repayment of redevelopment debts.
This bill would redefine the term "redevelopment" to include the
provision of loan assistance to qualified homeowners, until January
1, 2016, as determined by the agency. The bill would authorize a
redevelopment agency to use redevelopment funds to issue a
subordinate loan limited to low- and moderate-income borrowers and to
owner-occupied homes, to reduce the principal balance on the home
mortgages of qualified homeowners, as prescribed, who reside in or
outside of the project area. The bill would authorize the use of
funds outside the project area only upon a specified resolution of
the agency and the legislative body. The bill would authorize the
issuance of a subordinate loan only upon the agreement of the lender
to reduce the principal balance of the primary loan so that the
loan-to-value ratio is equal to or less than 110%. The bill would
repeal this authorization on January 1, 2016.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 33020 of the Health and Safety Code is amended
to read:
33020. "Redevelopment" means the planning, development,
replanning, redesign, clearance, reconstruction, or rehabilitation,
or any combination of these, of all or part of a survey area; the
provision of those residential, commercial, industrial, public, or
other structures or spaces as may be appropriate or necessary in the
interest of the general welfare, including recreational and other
facilities incidental or appurtenant to them; assistance to qualified
homeowners under Section 33137 until January 1, 2016; and payments
to school and community college districts in the fiscal years
specified in Sections 33681, 33681.5, 33681.7, 33681.9, and 33681.12.
SEC. 2. Section 33021 of the Health and Safety Code is amended to
read:
33021. Redevelopment includes:
(a) The alteration, improvement, modernization, reconstruction, or
rehabilitation, or any combination of these, of existing structures
in a project area.
(b) Provision for open-space types of use, such as streets and
other public grounds and space around buildings, and public or
private buildings, structures and improvements, and improvements of
public or private recreation areas and other public grounds.
(c) The replanning or redesign or original development of
undeveloped areas as to which either of the following conditions
exist.
(1) The areas are stagnant or improperly utilized because of
defective or inadequate street layout, faulty lot layout in relation
to size, shape, accessibility, or usefulness, or for other causes.
(2) The areas require replanning and land assembly for reclamation
or development in the interest of the general welfare because of
widely scattered ownership, tax delinquency, or other reasons.
(d) Issuance of loans to reduce the principal balance on the
mortgages of qualified homeowners under Section 33137 until January
1, 2016.
SEC. 3. Section 33137 is added to the Health and Safety Code, to
read:
33137. (a) An agency may use redevelopment funds to issue
subordinate loans to reduce the principal balance on the home
mortgages of qualified homeowners, as specified in subdivision (g)
and determined by the local agency, who reside in or outside of the
project area. The agency may use these funds outside the project area
only upon a resolution of the agency and the legislative body that
the use will be of benefit to the project area.
(b) The funds authorized by this section shall not include the
20-percent set aside funds for the construction of low- and
moderate-income housing required under Section 33334.2.
(c) Any subordinate loan authorized by this section shall be
issued only if the lender agrees to modify an existing home mortgage
to reduce the principal balance of the primary loan so that its
loan-to-value ratio is equal to or less than 110 percent.
(d) The subordinate loan provided by the agency shall be no more
than 15 percent of the remaining balance of the primary loan after
its loan-to-value ratio is reduced pursuant to subdivision (c).
(e) It is the intent of the Legislature that the subordinate loan
authorized in this section provide leverage to secure greater
principal reduction. It is further the intent of the Legislature that
the subordinate loan have a rational relationship to the amount
needed to prevent foreclosure and to the present value of the
forgiven principal.
(f) The subordinate loan, plus any applicable fees or interest
charges as determined by the agency, may be repaid to the agency upon
sale or refinance of the home. Prior to the sale or refinance, no
monthly payments shall be owed to the agency that holds the
subordinate loan.
(g) The subordinate loan shall be limited to low- and
moderate-income borrowers and to owner-occupied homes.
(h) For purposes of this section, "qualified homeowner" means a
low- or moderate-income homeowner who resides in his or her home.
(h)
(i) This section shall remain in effect only until
January 1, 2016, and as of that date is repealed, unless a later
enacted statute, that is enacted before January 1, 2016, deletes or
extends that date.
