Bill Text: CA AB1951 | 2011-2012 | Regular Session | Amended

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

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Bill Title: Housing bonds.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2012-09-29 - Chaptered by Secretary of State - Chapter 784, Statutes of 2012. [AB1951 Detail]

Download: California-2011-AB1951-Amended.html

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BILL NUMBER: AB 1951	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 29, 2012

INTRODUCED BY   Assembly Member Atkins

                        FEBRUARY 23, 2012

   An act  to amend Sections 50705, 50708, and 53545.9 of, and to
repeal Section 50707 of, the Health and Safety Code,   relating
to  bonds  housing  .


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1951, as amended, Atkins. Housing bonds.
   Existing law, the Housing and Emergency Shelter Trust Fund Act of
2006, authorizes the issuance of bonds to finance various housing
programs, capital outlay related to infill development, brownfield
cleanup that promotes infill development, housing-related parks, and
transit-oriented development programs.    The act
establishes the Housing and Emergency Shelter Trust Fund of 2006 in
the State Treasury and requires the sum of $1,500,000,000 to be
deposited in the Affordable Housing Account, which the act
establishes in the fund. The act continuously appropriates the money
in the account in accordance with a specified schedule that requires,
among other things, the transfer of the sum of $100,000,000 to 
 the Affordable Housing Innovation Fund, which the act
establishes in the State Treasury, to be administered by the
Department of Housing and Community Development.   Existing
law requires the funds in the Affordable Housing Innovation Fund to
be allocated in the amount of $50,000,000 for the Affordable Housing
Revolving Development and Acquisition Program, of which $25,000,000
would be made available to the Loan Fund and $25,000,000 would be
made available to the Practitioner Fund; $5,000,000 for the
Construction Liability Insurance Reform Pilot Program; $35,000,000
for a local housing trust fund matching grant program established
under a specified provision of existing law; and $10,000,000 for the
Innovative Homeownership Program.  
   This bill would state the intent of the Legislature to enact
legislation relating to housing bond programs.  
   This bill would repeal the provisions relating to the Practitioner
Fund and make conforming changes. This bill would delete the
provisions establishing the Construction Liability Insurance Reform
Pilot Program. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


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

   SECTION 1.    Section 50705 of the   Health
and Safety Code   is amended to read: 
   50705.  (a) The Affordable Housing Revolving Development and
Acquisition Program is hereby established for the purpose of funding
the acquisition of property to develop or preserve affordable
housing. The program will be comprised of a Loan Fund  and a
Practitioner Fund  .
   (b) The department shall adopt guidelines for the operation of the
program. The guidelines shall not be subject to the requirements of
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code. The department shall adopt
regulations for the program prior to issuing any request for
qualifications funded with loan repayments or any other sources.
   SEC. 2.    Section 50707 of the   Health and
Safety Code   is repealed.  
   50707.  (a) The department shall issue a request for qualification
to select one or more nonprofit entities that qualify under Section
501(c)(3) of the Internal Revenue Code to borrow moneys from the
Practitioner Fund to purchase real property for the development or
preservation of housing affordable to low- and moderate-income
households. The selection of one or more nonprofit entities that
qualify shall be made by the department, based on the review and
recommendation of the department's Loan and Grant Committee. The loan
from the Practitioner Fund will be for a maximum of five years.
   (b) The entity or entities selected pursuant to subdivision (a)
shall demonstrate all of the following:
   (1) Operation as a nonprofit entity that qualifies under Section
501(c)(3) of the Internal Revenue Code with housing development
experience in this state and a minimum of 25 employees.
   (2) Availability of additional funds of at least three times the
loan amount.
   (3) Completion of not less than 2,500 total housing units, with
each housing development project having a majority of its units
affordable to low- and moderate-income families, as defined in
Section 50052.5 or 50053. For purposes of this requirement, the
applicant shall be the developer of record with primary day-to-day
management and financial responsibility for the development.
   (4) Sufficient organizational stability and capacity to use the
Practitioner Fund to achieve scale economies in the development and
preservation of affordable housing. Capacity may be demonstrated by
substantial successful experience in affordable housing development
and management, including successful partnerships with local
government entities.
   (5) Assets worth at least two hundred million dollars
($200,000,000), to demonstrate evidence of sufficient net worth for
assurance of repayment of the loan.
   (c) The guidelines and regulations, at a minimum, shall do all of
the following:
   (1) Establish the minimum criteria required of the practitioner
and a point system for rating and ranking responses.
   (2) Provide that any equity not originally contributed by the
borrower shall be returned to the state for the purposes of this
program, if property acquired with state funds is sold or transferred
for purposes other than affordable housing.
   (3) Give priority to those respondents who demonstrate an
immediate need of funds from the committee and who can demonstrate
the greatest levels of efficiency and economies of scale.
   (4) Establish a reasonable practitioner administrative fee.
   (d) Funds not used by a practitioner within 36 months after their
availability to the practitioner shall be disencumbered and
transferred to the Loan Fund.
   (e) The guidelines and regulations shall require that before
expending any state funds, the borrower shall obtain binding
commitments for at least three dollars ($3) of nonstate acquisition
capital to leverage every dollar of loan funds. To be considered
nonstate acquisition capital, those funds shall be committed for a
term at least equal to the term of the loan made under this section,
and shall be available to be used for the purposes of this section.
Equity from the anticipated sale of either federal or state
low-income housing tax credits shall not be considered nonstate
acquisition capital. If the selected entity is unable to meet these
capital leveraging requirements within 180 days after selection, the
loan shall be repaid, with accumulated interest, to the department,
deposited in the fund, and made available to the next highest rated
qualified project sponsor. If, within 270 days after selection, there
is no remaining qualified applicant available in the case of the
Practitioner Fund, any unexpended funds shall be made available for
the purposes of Section 50706.
   (f) The department shall establish a schedule for the timely
expenditure of funds by the applicant. The department may require
repayment in the event that a selected entity fails to use the funds
consistently with the schedule and the other terms of the program.

   SEC. 3.    Section 50708 of the   Health and
Safety Code   is amended to read: 
   50708.  The department shall collect all of the following from
each borrower and include a summary of this information in its last
annual report submitted to the Legislature on or before December 31,
2013, pursuant to Section 50408:
   (a) A general description of activities undertaken pursuant to
this chapter.
   (b) For each property acquired, the acquisition price; the amount
and terms of the nonstate funds leveraged, and a statement as to
whether the state acquisition funds were essential to the leveraging
of these other acquisition funds; a description of the expiration
date of the project's rent or sales restrictions; the number of
assisted units created or preserved; the amount of state funds
required for each assisted unit created or preserved; and the level
of affordability maintained.
   (c) If any borrower sells any property acquired with assistance
through these state funds, a description of the name and location of
the purchaser, the purchase price, and the total transaction costs.

   (d) A comparison of the cost of creating or preserving units under
Section 50706 with that of Section 50707.  
   (e) 
    (d)  An overall assessment of the effectiveness of these
funds as tools in creating and preserving affordable housing.
   SEC. 4.    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) 
    (b)  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.
   (3) (A) Notwithstanding any other  provision of 
law, funds set aside for newly established housing trust funds shall
be available for encumbrance for 42 months after the date the funds
are first made available and disbursements in liquidation of the
encumbrance shall be made before or during 48 months after the date
funds are first made available.
   (B) Notwithstanding subparagraph (F) of paragraph (1) of
subdivision (a) of Section 53545, any funds not encumbered for newly
established housing trust funds within 42 months after the date the
funds are first made available shall revert to the Self-Help Housing
Fund created by Section 50697.1 and shall be available for the
purposes described in subparagraph (D) of paragraph (1) of
subdivision (a) of Section 53545. 
   (d) 
    (c)  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. 
  SECTION 1.    It is the intent of the Legislature
to enact legislation that would advance the will of the voters by
making changes to underperforming housing bond programs to better
align them with the extraordinary housing crisis facing Californians.