Bill Text: CA AB570 | 2009-2010 | Regular Session | Chaptered
Bill Title: Local Housing Trust Fund Matching Grant Program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2009-10-11 - Chaptered by Secretary of State - Chapter 455, Statutes of 2009. [AB570 Detail]
Download: California-2009-AB570-Chaptered.html
BILL NUMBER: AB 570 CHAPTERED
BILL TEXT
CHAPTER 455
FILED WITH SECRETARY OF STATE OCTOBER 11, 2009
APPROVED BY GOVERNOR OCTOBER 11, 2009
PASSED THE SENATE AUGUST 24, 2009
PASSED THE ASSEMBLY AUGUST 27, 2009
AMENDED IN SENATE JUNE 15, 2009
AMENDED IN ASSEMBLY MARCH 27, 2009
INTRODUCED BY Assembly Member Arambula
FEBRUARY 25, 2009
An act to amend Sections 50843.5 and 53545.9 of the Health and
Safety Code, relating to housing.
LEGISLATIVE COUNSEL'S DIGEST
AB 570, Arambula. Local Housing Trust Fund Matching Grant Program.
(1) Existing law establishes the Local Housing Trust Fund Matching
Grant Program for the purpose of supporting local housing trust
funds dedicated to the creation or preservation of affordable
housing. Under the grant program, the Department of Housing and
Community Development is authorized to make matching grants available
to cities and counties, or a city and county, and existing
charitable nonprofit organizations that have created, funded, and
operated housing trust funds. The minimum allocation to a program
applicant is $1,000,000, and the maximum allocation is $2,000,000,
with all funds provided under the grant program to be matched on a
dollar-for-dollar basis with money that is not required by any state
or federal law to be spent on housing.
This bill would establish the minimum allocation at $500,000 for a
newly established trust, as defined, that is in a county with a
population of less than 425,000 persons, based on the decennial
United States Census for the year 2000, and at $1,000,000 for all
other trusts.
The bill would prohibit an application for a new trust to be
considered unless the Department of Housing and Community Development
has received adequate documentation, as determined by the
department, that an ordinance imposing or dedicating a tax or fee to
be deposited into the new trust has been enacted or the applicant has
adopted a legally binding commitment to deposit matching funds into
the new trust. The bill would prohibit funds to be disbursed by the
department to any trust until all matching funds are on deposit.
(2) Existing law requires that in order to be eligible for
funding, a city, county, city and county, or nonprofit organization
applicant meet a specified requirement.
This bill would additionally require the city, county, or city and
county to submit an annual progress report required by existing law
within a specified time if the department has adopted certain forms
and definitions. The bill would additionally require a nonprofit
organization to agree to utilize the funds in a project located in
such a municipality that has submitted that report.
(3) Existing law requires the Department of Housing and Community
Development to make available the amount of $35,000,000 for the Local
Housing Trust Fund Matching Grant Program, and requires the
department, when awarding grants using those funds to newly
established housing trust funds, to set aside funding, for a period
of 36 months from the date funds are first made available, for newly
established housing trust funds that are in a county with a
population of less than 425,000 persons.
This bill would require that this maximum population figure be
based on the decennial United States Census for the year 2000.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 50843.5 of the Health and Safety Code is
amended to read:
50843.5. (a) Subject to the availability of funding, the
department shall make matching grants available to cities, counties,
city and counties, and charitable nonprofit organizations organized
under Section 501(c)(3) of the Internal Revenue Code that have
created and are operating or will operate housing trust funds. These
funds shall be awarded through the issuance of a Notice of Funding
Availability (NOFA).
(1) Applicants that provide matching funds from a source or
sources other than impact fees on residential development shall
receive a priority for funding.
(2) The department shall set aside funding for new trusts, as
defined by the department in the NOFA.
(b) Housing trusts eligible for funding under this section shall
have the following characteristics:
(1) Utilization of a public or joint public and private fund
established by legislation, ordinance, resolution, or a
public-private partnership to receive specific revenue to address
local housing needs.
(2) Receipt of ongoing revenues from dedicated sources of funding
such as taxes, fees, loan repayments, or private contributions.
(c) The minimum allocation to an applicant that is a newly
established trust, and is in a county with a population that conforms
with paragraph (2) of subdivision (c) of Section 53545.9, shall be
five hundred thousand dollars ($500,000). The minimum allocation for
all other trusts shall be one million dollars ($1,000,000). No
applicant may receive an allocation in excess of two million dollars
($2,000,000). All funds provided pursuant to this section shall be
matched on a dollar-for-dollar basis with money that is not required
by any state or federal law to be spent on housing. No application
for an existing housing trust shall be considered unless the
department has received adequate documentation of the deposit in the
local housing trust fund of the local match and the identity of the
source of matching funds. An application for a new trust shall not be
considered unless the department has received adequate
documentation, as determined by the department, that an ordinance
imposing or dedicating a tax or fee to be deposited into the new
trust has been enacted or the applicant has adopted a legally binding
commitment to deposit matching funds into the new trust. Funds shall
not be disbursed by the department to any trust until all matching
funds are on deposit and then funds may be disbursed only in amounts
necessary to fund projects identified to receive a loan from the
trust within a reasonable period of time, as determined by the
department. Applicants shall be required to continue funding the
local housing trust fund from these identified local sources, and
continue the trust in operation, for a period of no less than five
years from the date of award. If the funding is not continued for a
five-year period, then (1) the amount of the department's grant to
the local housing trust fund, to the extent that the trust fund has
unencumbered funds available, shall be immediately repaid, and (2)
any payments from any projects funded by the local housing trust fund
that would have been paid to the local housing trust fund shall be
paid instead to the department and used for the program or its
successor. The total amount paid to the department pursuant to (1)
and (2), combined, shall not exceed the amount of the department's
grant.
(d) (1) Funds shall be used for the predevelopment costs,
acquisition, construction, or rehabilitation of the following types
of housing or projects:
(A) Rental housing projects or units within rental housing
projects. The affordability of all assisted units shall be restricted
for not less than 55 years.
(B) Emergency shelters, safe havens, and transitional housing, as
these terms are defined in Section 50801.
(C) For sale housing projects or units within for sale housing
projects.
(2) At least 30 percent of the total amount of the grant and the
match shall be expended on projects, units, or shelters that are
affordable to, and restricted for, extremely low income persons and
families, as defined in Section 50106. No more than 20 percent of the
total amount of the grant and the match shall be expended on
projects or units affordable to, and restricted for, moderate-income
persons and families whose income does not exceed 120 percent of the
area median income. The remaining funds shall be used for projects,
units, or shelters that are affordable to, and restricted for, lower
income persons and families, as defined in Section 50079.5.
(3) If funds are used for the acquisition, construction, or
rehabilitation of for sale housing projects or units within for sale
housing projects, the grantee shall record a deed restriction against
the property that will ensure compliance with one of the following
requirements upon resale of the for sale housing units, unless it is
in conflict with the requirements of another public funding source or
law:
(A) If the property is sold within 30 years from the date that
trust funds are used to acquire, construct, or rehabilitate the
property, the owner or subsequent owner shall sell the home at an
affordable housing cost, as defined in Section 50025.5, to a
household that meets the relevant income qualifications.
(B) The owner and grantee shall share the equity in the unit
pursuant to an equity sharing agreement. The grantee shall reuse the
proceeds of the equity sharing agreement consistent with this
section. To the extent not in conflict with another public funding
source or law, all of the following shall apply to the equity-sharing
agreement provided for by the deed restriction:
(i) Upon resale by an owner-occupant of the home, the
owner-occupant of the home shall retain the market value of any
improvements, the downpayment, and his or her proportionate share of
appreciation. The grantee shall recapture any initial subsidy and its
proportionate share of appreciation, which shall then be used to
make housing available to persons and families of the same income
category as the original grant and for any type of housing or shelter
specified in paragraph (1).
(ii) For purposes of this subdivision, the initial subsidy shall
be equal to the fair market value of the home at the time of initial
sale to the owner-occupant minus the initial sale price to the
owner-occupant, plus the amount of any downpayment assistance or
mortgage assistance. If upon resale by the owner-occupant the market
value is lower than the initial market value, then the value at the
time of the resale shall be used as the initial market value.
(iii) For purposes of this subdivision, the grantee's
proportionate share of appreciation shall be equal to the ratio of
the initial subsidy to the fair market value of the home at the time
of the initial sale.
(e) Loan repayments shall accrue to the grantee housing trust for
use pursuant to this section. If the trust no longer exists, loan
repayments shall accrue to the department for use in the program or
its successor.
(f) (1) In order for a city, county, or city and county to be
eligible for funding, the applicant shall, at the time of
application, meet both of the following requirements:
(A) Have an adopted housing element that the department has
determined, pursuant to Section 65585 of the Government Code, is in
substantial compliance with the requirements of Article 10.6
(commencing with Section 65580) of Chapter 3 of Division 1 of Title 7
of the Government Code.
(B) Have submitted to the department the annual progress report
required by Section 65400 of the Government Code within the preceding
12 months, if the department has adopted the forms and definitions
pursuant to subparagraph (B) of paragraph (2) of subdivision (a) of
Section 65400 of the Government Code.
(2) In order for a nonprofit organization applicant to be
eligible for funding, the applicant shall agree to utilize funds
provided under this chapter only for projects located in cities,
counties, or a city and county that, at the time of application, meet
both of the following requirements:
(1) Have an adopted housing element that the department has
determined, pursuant to Section 65585 of the Government Code, to be
in substantial compliance with the requirements of Article 10.6
(commencing with Section 65580) of Chapter 3 of Division 1 of Title 7
of the Government Code.
(2) Have submitted to the department the annual progress report
required by Section 65400 of the Government Code within the preceding
12 months, if the department has adopted the forms and definitions
pursuant to subparagraph (B) of paragraph (2) of subdivision (a) of
Section 65400 of the Government Code.
(g) Recipients shall have held, or shall agree to hold, a public
hearing or hearings to discuss and describe the project or projects
that will be financed with funds provided pursuant to this section.
As a condition of receiving a grant pursuant to this section, any
nonprofit organization shall agree that it will hold one public
meeting a year to discuss the criteria that will be used to select
projects to be funded. That meeting shall be open to the public, and
public notice of this meeting shall be provided, except to the extent
that any similar meeting of a city or county would be permitted to
be held in closed session.
(h) No more than 5 percent of the funds appropriated to the
department for the purposes of this program shall be used to pay the
costs of administration of this section.
(i) A local housing trust fund shall encumber funds provided
pursuant to this section no later than 36 months after receipt. Any
funds not encumbered within that period shall revert to the
department for use in the program or its successor.
(j) Recipients shall be required to file periodic reports with the
department regarding the use of funds provided pursuant to this
section. No later than December 31 of each year in which funds are
awarded by the program, the department shall provide a report to the
Legislature regarding the number of trust funds created, a
description of the projects supported, the number of units assisted,
and the amount of matching funds received.
SEC. 2. Section 53545.9 of the Health and Safety Code is amended
to read:
53545.9. Of the one hundred million dollars ($100,000,000)
transferred to the Affordable Housing Innovation Fund established in
the State Treasury under subparagraph (F) of paragraph (1) of
subdivision (a) of Section 53545, the following amounts shall be
allocated as follows:
(a) (1) The department shall make available the amount of fifty
million dollars ($50,000,000) for the Affordable Housing Revolving
Development and Acquisition Program.
(2) Of the amount made available for the program, twenty-five
million dollars ($25,000,000) shall be made available for the Loan
Fund and twenty-five million dollars ($25,000,000) shall be made
available for the Practitioner Fund.
(b) The department shall make available the amount of five million
dollars ($5,000,000) for the Construction Liability Insurance Reform
Pilot Program, which is hereby established in the Department of
Housing and Community Development. The purpose of the program is to
promote best practices for residential construction quality control
in housing programs sponsored by the department or the California
Housing Finance Agency, as a means of reducing insurance rates for
condominium developers in this state. Funds shall be made available
in the form of grants for predevelopment costs of condominium
projects funded by the department or the California Housing Finance
Agency that utilize enhanced construction oversight and monitoring
programs and processes, including, but not limited to, video
recording of the construction process, use of quality control
manuals, and increased quality control inspections.
(c) The department shall make available the amount of thirty-five
million dollars ($35,000,000) for the local housing trust fund
matching grant program established under Section 50843.5. The
department shall make available 50 percent of this amount exclusively
for newly established housing trust funds.
(1) When awarding grants from the funds allocated under this
subdivision to existing trust funds, the department shall grant
preference to a housing trust fund that agrees to expend more than 65
percent of state funds for the purpose of downpayment assistance to
first-time homebuyers.
(2) When awarding grants from the funds allocated under this
subdivision to newly established housing trust funds, the department
shall set aside funding, for a period of 36 months from the date
funds are first made available, for newly established housing trust
funds that are in a county with a population of less than 425,000
persons, based on the decennial United States Census for the year
2000.
(d) The department shall make available the amount of ten million
dollars ($10,000,000) for the Innovative Homeownership Program, which
the department shall develop and implement as follows:
(1) The program shall be designed to increase or maintain
affordable homeownership opportunities for Californians with lower
incomes.
(2) The department shall adopt guidelines for the program that,
among other things, shall maximize the number of units assisted,
limit the expenditure of funds for administrative costs, and maximize
the leverage of public and private financing sources.
(3) The guidelines adopted by the department shall provide for the
issuance of a notice of funding availability soliciting competitive
proposals for the use of funds consistent with those guidelines and
with subparagraph (F) of paragraph (1) of subdivision (a) of Section
53545.
(4) The guidelines adopted by the department shall not be subject
to the requirements of Chapter 6.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code.
(5) The department shall include within the annual report required
under Section 50408 a detailed summary and description of the manner
in which funds made available under this subdivision were expended
during the previous year and a statement regarding the manner in
which those expenditures meet the intent of the Legislature and the
voters that funds from the Innovative Housing Fund be expended in
support of innovative, cost-saving approaches to creating or
preserving affordable housing.
