Bill Text: CA AB1951 | 2011-2012 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
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
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
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 tobondshousing . 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:noyes . 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 Fundand 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 Fundand 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 otherprovision oflaw, 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.