Bill Text: CA AB1053 | 2023-2024 | Regular Session | Chaptered

California Assembly Bill 1053

Bill Title: Housing programs: multifamily housing programs: expenditure of loan proceeds.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Passed) 2024-09-19 - Chaptered by Secretary of State - Chapter 264, Statutes of 2024. [AB1053 Detail]

Download: California-2023-AB1053-Chaptered.html

Assembly Bill No. 1053

CHAPTER 264

An act to add Section 50406.3 to the Health and Safety Code, relating to housing.

[ Approved by Governor September 19, 2024. Filed with Secretary of State September 19, 2024. ]

LEGISLATIVE COUNSEL'S DIGEST

AB 1053, Gabriel. Housing programs: multifamily housing programs: expenditure of loan proceeds.

Existing law establishes the Department of Housing and Community Development and requires it to administer various programs intended to promote the development of housing, including the Multifamily Housing Program, pursuant to which the department provides financial assistance in the form of deferred payment loans to pay for the eligible costs of development of specified types of housing projects. Existing law sets forth various general powers of the department in implementing these programs, including authorizing the department to enter into long-term contracts or agreements of up to 30 years for the purpose of servicing loans or grants or enforcing regulatory agreements or other security documents.

Existing law, the Administrative Procedure Act, sets forth procedures a state agency is required to follow when adopting, amending, or repealing any regulation, including providing public notice and time for public comment, with exceptions for emergency regulations in the case of a situation that calls for immediate action to avoid serious harm to the public peace, health, safety, or general welfare.

This bill would authorize a borrower to use any funds approved, reserved, or allocated by the department following the effective date of specified guidelines and for purposes of providing a loan under specified multifamily housing programs, including the Multifamily Housing Program, or any additional multifamily housing lending program that the department elects, for construction financing, permanent financing, or a combination of construction financing and permanent financing, as provided. The bill would require the department, by July 1, 2026, to adopt guidelines as emergency regulations to, among other things, implement these provisions. The bill would also require the department, by January 1, 2027, to adopt guidelines, in accordance with the rulemaking provisions of the Administrative Procedure Act, to, among other things, implement these provisions. The bill would authorize the department to charge fees, including, but not limited to, application and monitoring fees, to cover the enhanced administrative costs under the bill’s provisions. The bill would specify that these provisions do not limit the eligible uses of funds otherwise authorized under any program administered by the department. The bill would specify that the implementation of its provisions are contingent upon appropriation by the Legislature of sufficient funds for specified purposes.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Section 50406.3 is added to the Health and Safety Code, to read:

50406.3.

(a) Notwithstanding any other law, any funds approved, reserved, or allocated by the department after the effective date of the guidelines required pursuant to subdivision (b) and for purposes of providing a loan under the Multifamily Housing Program (Chapter 6.7 (commencing with Section 50675)), the Joe Serna, Jr. Farmworker Housing Grant Program (Chapter 3.2 (commencing with Section 50515.2)), the Affordable Housing and Sustainable Communities Program (Part 1 (commencing with Section 75200) of Division 44 of the Public Resources Code), or any additional multifamily housing lending program that the department elects, may, at the option of the borrower, be used for any of the following purposes:

(1) Construction financing.

(2) Permanent financing.

(3) A portion for construction financing, with the balance used for permanent financing.

(b) (1) By July 1, 2026, the department shall adopt guidelines to implement this section as emergency regulations. The adoption of emergency regulations authorized by this subparagraph is deemed to address an emergency, for purposes of Sections 11346.1 and 11349.6 of the Government Code, and the department is hereby exempted for this purpose from the requirements of subdivision (b) of Section 11346.1 of the Government Code. For purposes of subdivision (e) of Section 11346.1 of the Government Code, the 180-day period, as applicable to the effective period of an emergency regulatory action and submission of specified materials to the Office of Administrative Law, is hereby extended to one year.

(2) By July 1, 2027, the department shall adopt guidelines, in accordance with the provisions of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, to implement this section.

(3) The guidelines adopted under paragraphs (1) and (2) shall do all of the following:

(A) Govern the disbursement and use of funds prior to permanent financing.

(B) Be designed to establish an efficient and timely disbursement process that mitigates the additional risks of construction financing.

(C) Address topics, including, but not limited to, project and sponsor construction financing eligibility, construction disbursement methods, and construction reporting requirements.

(c) The department may require that at least 10 percent of the department’s loan amount may be retained until permanent conversion based on the project and sponsor risk profile.

(d) The department may charge fees, including, but not limited to, application and monitoring fees, to cover the enhanced administrative costs provided under this section.

(e) This section shall not be construed to limit the eligible uses of funds otherwise authorized under any program provided under this part.

(f) The implementation of this section is contingent upon appropriation by the Legislature of sufficient funds to the department to create and adopt guidelines pursuant to subdivision (b) and to administer multifamily housing programs for this purpose.