Bill Text: CA AB2186 | 2021-2022 | Regular Session | Amended

California Assembly Bill 2186 (Prior Session Legislation)

Bill Title: Housing Cost Reduction Incentive Program.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Engrossed - Dead) 2022-08-11 - In committee: Held under submission. [AB2186 Detail]

Download: California-2021-AB2186-Amended.html

Amended IN Senate August 01, 2022

Amended IN Assembly May 02, 2022

Amended IN Assembly April 18, 2022

Amended IN Assembly March 23, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill

No. 2186

Introduced by Assembly Members Grayson, Quirk-Silva, and Wicks
(Coauthor: Assembly Member Gabriel)

February 15, 2022

An act to add Chapter 16.5 (commencing with Section 50896.5) to Part 2 of Division 31 of the Health and Safety Code, relating to housing.

LEGISLATIVE COUNSEL'S DIGEST

AB 2186, as amended, Grayson. Housing Cost Reduction Incentive Program.

Existing law establishes, among other housing programs, the Multifamily Housing Program, pursuant to which the Department of Housing and Community Development provides financial assistance in the form of deferred payment loans to pay for the eligible costs of development for specified types of housing projects. Existing law, the Mitigation Fee Act, establishes procedures and limitations with respect to the establishment, increase, or imposition of fees, as defined, as a condition of approval of a development project by a local agency, including requiring the local agency to determine the reasonable relationship between the fee’s use and the type of development project on which the fee is imposed.

This bill would establish the Housing Cost Reduction Incentive Program, to be administered by the department, for the purpose of reimbursing cities, counties, and cities and counties for development impact fee reductions provided to qualified housing developments, as defined, and for the reasonable interest costs associated with impact fee deferrals. Upon appropriation, the bill would require the department to provide grants to applicants in an amount equal to 50% of the amount of development impact fee reduced for a qualified housing development and grants to applicants in an amount equal to the accrued interest on a deferred development impact fee, as provided. ~~This~~

This bill would require the department to administer these grants by issuing a Notice of Funding Availability before December 31 of the year that the program receives funding, as specified, and accepting grant applications after the subsequent year. The bill would require a public entity that receives grant funds under the program to use those funds solely for those purposes for which the development impact fee that was reduced or deferred would have been used. The bill would require the department to adopt guidelines to implement the program and exempt those guidelines from the rulemaking provisions of the Administrative Procedure Act. The bill would require the department to solicit and consider stakeholder comments in the design and implementation of the program, as specified, and to provide responses in writing to substantive written comments.

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

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

SECTION 1.

Chapter 16.5 (commencing with Section 50896.5) is added to Part 2 of Division 31 of the Health and Safety Code, to read:

CHAPTER 16.5. Housing Cost Reduction Incentive Program

50896.5.

For purposes of this chapter:

(a) “Applicant” means a city, county, or city and county.

(b) “Development impact fee” means a fee, as that term is defined in subdivision (b) of Section 66000 of the Government Code.

(d) “Program” means the Housing Cost Reduction Incentive Program established in Section 50896.6.

(e) “Qualified housing development” means a rental housing development that is or will be subject to a recorded regulatory agreement with a public entity that requires that at least 75 percent of the units, excluding any manager’s units, be affordable to, and occupied by, lower income households, or a home ownership development that will be sold to low- or moderate-income households at an affordable housing cost.

50896.6.

(a) There is hereby established the Housing Cost Reduction Incentive Program for the purpose of reimbursing applicants for development impact fee reductions provided to qualified housing developments and for the reasonable interest cost associated with development impact fee deferrals.

(b) The department shall administer the program.

50896.7.

(a) Upon appropriation by the Legislature for purposes of the program, the department shall do all of the following:

(1) Provide grants to applicants in an amount equal to 50 percent of the amount of each development impact fee reduction by an applicant for a qualified ~~rental~~ housing development. The fee reduction shall be calculated by subtracting the amount of the total development impacts fee charged by the applicant to each qualified housing development from the amount of the total development impact fees that would have been charged by the applicant to an equivalent project that is not a qualified housing development.

(2) Provide grants to applicants in an amount equal to the interest that accrues at the annual, mid-term Applicable Federal Rate, as determined by the Internal Revenue Service, on development impact fees for qualified housing developments that the applicant defers until, in the case of a rental development, the conversion to permanent financing and, in the case of an ownership development, each unit is sold. An applicant may defer payment of the development impact fees for a longer time, but the grant shall cover interest only for the time period described in this paragraph.

(3) When funds are made available for the program, issue a NOFA before December 31 of that year to cover each applicant’s development impact fee reductions and deferrals during the subsequent year. The department shall accept applications after the subsequent year.

(4) If for any NOFA the amount of funds made available for the program is insufficient to provide each eligible applicant with the full amount specified in paragraphs (1) and (2), the department shall reduce the amount of grant funds awarded to each eligible applicant proportionally.

(b) A development impact fee, the reduction or deferral of which an applicant may seek a grant pursuant to the program, shall be limited to a development impact fee imposed by an applicant in accordance with the Mitigation Fee Act (Chapter 5 (commencing with Section 66000), Chapter 6 (commencing with Section 66010), Chapter 7 (commencing with Section 66012), Chapter 7.5 (commencing with Section 66015), Chapter 8 (commencing with Section 66016), and Chapter 9 (commencing with Section 66020) of Division 1 of Title 7 of the Government Code).

50896.8.

(a) An applicant that receives a grant under the program shall deposit or transfer those funds to the same public entity and fund or account to which it would otherwise deposit or transfer the proceeds of a development impact fee imposed on a qualified housing development if that fee had not been reduced or deferred. The public entity shall use grant funds solely for those purposes for which the development impact fee that was reduced or deferred would have been used.

(b) An applicant shall not apply to receive reimbursement for a development impact fee reduction or deferral related to a fee ~~benefitting~~ benefiting an independent special district unless the applicant received the written approval of the independent special district for the reduction or deferral on or before the date on which the applicant granted the reduction or deferral.

(c) Grant funds awarded pursuant to the program shall be deemed to be fees collected for purposes of Section 66006 of the Government Code.

50896.9.

(a) The department shall adopt guidelines for the operation of the program. Program guidelines adopted pursuant to this section shall not be subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

(b) Prior to adopting initial guidelines for the operations of the program, the department shall solicit and consider stakeholder comments in the design and implementation of the program in at least one 30-day public comment period. The department shall provide responses in writing to substantive written comments.