Bill Text: CA SB584 | 2023-2024 | Regular Session | Amended

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

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Bill Title: Laborforce housing: Short-Term Rental Tax Law.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed) 2023-06-29 - June 28 set for first hearing canceled at the request of author. [SB584 Detail]

Download: California-2023-SB584-Amended.html

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Amended  IN  Senate  March 21, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill

No. 584

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Introduced by Senator Limón

February 15, 2023

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An act to amend Section 6300 of the Labor Code, relating to occupational safety. An act to add Chapter 3.6 (commencing with Section 50535) to Part 2 of Division 31 of the Health and Safety Code, relating to housing, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL'S DIGEST

SB 584, as amended, Limón. Occupational safety. Laborforce housing.

Existing law establishes the Department of Housing and Community Development and sets forth its powers and duties. Existing law establishes various programs providing assistance for, among other things, emergency housing, multifamily housing, farmworker housing, homeownership for very low and low-income households, and downpayment assistance for first-time homebuyers.

This bill would enact the Laborforce Housing Financing Act of 2023, and define “laborforce housing” as housing that, among other things, is owned and managed by specified entities solely for the benefit of residents and households unable to afford market rent, and whose residents enjoy certain protections. The bill would establish, in the State Treasury, the Laborforce Housing Fund, to be continuously appropriated to the department, for the creation of laborforce housing and other specified housing projects by public entities, local housing authorities, and mission-driven nonprofit housing providers, as provided. By creating a new continuously appropriated fund, the bill would make an appropriation.

The bill would also provide that the operator of a residential property and a transient occupancy business, as defined, that facilitates the payment of rent made by a person for transient occupancy in a residential property rented for transient occupancy after January 1, 2024, are jointly and severally liable for a laborforce housing assessment, as provided, to be paid to the department no later than 90 days after the rent is received. The bill would require all laborforce housing assessments received by the department be deposited in the Laborforce Housing Fund. The bill would require the department to adopt rules, policies, guidelines, or standards to implement these provisions, as provided.

The bill would limit the use of fund moneys to construction or rehabilitation projects that require either that all construction workers on the project are paid at least the applicable prevailing wage rate, or that all contractors and subcontractors at every tier will use a skilled and trained workforce to complete the project, in accordance with specified provisions. These certifications would expand the crime of perjury, thereby imposing a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law, the California Occupational Safety and Health Act of 1973, was enacted for the purpose of ensuring safe and healthful working conditions by, among other things, authorizing the enforcement of effective standards.

This bill would make nonsubstantive changes to that provision.

Digest Key

Vote: MAJORITY2/3   Appropriation: NOYES   Fiscal Committee: NOYES   Local Program: NOYES  

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Bill Text

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

SECTION 1.

 This act shall be known as the Laborforce Housing Financing Act of 2023.

SEC. 2.

 Chapter 3.6 (commencing with Section 50535) is added to Part 2 of Division 31 of the Health and Safety Code, to read:

CHAPTER  3.6. Laborforce Housing

Article  1. General Provisions

50535.

 The Legislature finds and declares all of the following:

(a) The affordable housing crisis in the State of California is a statewide problem that continues to worsen and that is causing individual suffering and weighing down the California economy. No locality has the ability to address this crisis on its own.

(1) California’s statewide housing crisis is exacerbated by the commercial use of residential homes and apartments for transient occupancies. Such commercial use of residential homes and apartments reduces the supply of residential units available for permanent residency and raises rents for permanent occupants.

(2) Current efforts to address the affordable housing crisis by incentivizing private production of affordable housing by for-profit and nonprofit developers are laudable, but they are not sufficient on their own to alleviate the crisis. Nor are rent subsidies for low-income tenants, while laudable, sufficient on their own to create an adequate supply of affordable housing.

(3) The experience in other countries demonstrates that California’s affordable housing crisis will not be resolved unless the government plays a greater role in building and rehabilitating affordable housing projects. The government must learn to play this role without creating the problems that plagued public housing projects in the past.

(b) It is the intent of the Legislature to create a state program to finance publicly owned housing that is built sustainably with union labor and that avoids the problems that plagued public housing projects in the past. If successful, this program can be expanded in the future.

(c) It is also the intent of the Legislature to impose a statewide assessment on the commercial use of residential homes and apartments for transient occupancy and to use the money collected to pay for the development and rehabilitation of affordable housing to partly replace the residential units that are not available for permanent occupancy.

50535.1.

 For purposes of this chapter, the following definitions apply:

(a) “Afford” and “affordable” mean that a household pays no more than 30 percent of its household income on rent.

(b) “Community land trust” has the same meaning as that term is defined in clause (ii) of subparagraph (C) of paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.

(c) “Department” means the Department of Housing and Community Development.

(d) “Extremely low income” has the same meaning as the term “extremely low income households” is defined in Section 50106 of the Health and Safety Code.

(e) (1) “Laborforce housing” means housing that meets all of the following requirements:

(A) The housing units are owned and managed by a public entity, a local housing authority, a community land trust, or a mission-driven not-for-profit private entity solely for the benefit of residents and households unable to afford market rent.

(B) Each housing development contains housing units that accommodate a mix of household income ranges, including extremely low income, very low income, and low income, as well as moderate income households unable to afford market rent, and all housing units are permanently deed-restricted affordable to households at each of those income levels to ensure that every household pays an affordable rent.

(C) Residents of the housing units enjoy the protections set forth in Section 50539, and shall be afforded due process prior to being subject to eviction procedures.

(D) The housing units are protected for the duration of their useful life, and the land associated with the housing units is protected permanently from being sold or transferred to any private person or for-profit entity or a public-private partnership.

(E) Residents have the right to participate directly and meaningfully in decisionmaking affecting the operation and management of the housing units in which they reside.

(2) “Laborforce housing” includes both new construction of units of laborforce housing and the acquisition and rehabilitation of existing housing units preserved as laborforce housing.

(f) “Laborforce Housing Fund” means the fund established by Section 50537.

(g) “Low income” has the same meaning as the term “lower income household” is defined in Section 50079.5 of the Health and Safety Code.

(h) “Mission-driven not-for-profit entity” means an eligible nonprofit corporation with all of the attributes described in subparagraph (D) of paragraph (3) of subdivision (a) of Section 2924m of the Civil Code.

(i) “Moderate income” has the same meaning as the term “persons and families of moderate income” is defined in Section 50093 of the Health and Safety Code.

(j) “Operator” means a person who is proprietor of a residential property rented for transient occupancy, whether in the capacity of owner, lessee, sublessee, mortgagee in possession, licensee, or any other capacity. Where the operator performs their functions through a managing agent of any type or character other than an employee, the managing agent shall also be deemed an operator for the purposes of this chapter, and shall have the same duties and liabilities as their principal.

(k) “Person” means any individual, firm, partnership, joint venture, association, social club, fraternal organization, joint stock company, corporation, estate, trust, business trust, receiver, trustee, syndicate, or any other group or combination acting as a unit.

(l) “Prevailing wage rates” means the wage rates determined by the Director of Industrial Relations pursuant to Part 7 (commencing with Section 1720) of Division 2 of the Labor Code.

(m) “Project labor agreement” means an agreement that meets the requirements of Section 2500 of the Public Contract Code.

(n) “Rent” means the consideration charged by the operator, valued in money, for the occupancy of the residential property rented for transient occupancy, including any fee, including, but not limited, to a cleaning fee or charge, without any deduction therefrom whatsoever.

(o) “Residential property rented for transient occupancy” means any structure in the state, or any portion of that structure, which is zoned for residential use as a home or apartment, and is rented for transient occupancy for dwelling, lodging or sleeping purposes. “Residential property rented for transient occupancy” does not include a hotel, inn, motel, bed and breakfast, or similar business.

(p) “Skilled and trained workforce” has the same meaning as provided in Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code.

(q) “Transient occupancy” means the use or possession, or the right to the use or possession, of any buildings, structures, or portion thereof for dwelling, lodging, or sleeping purposes, by reason of concession, permit, right of access, license, or other agreement for a period of 30 consecutive calendar days or less, counting portions of calendar days as full days.

(r) “Transient occupancy business” means any person in the business of arranging for the rental of residential property for transient occupancy. “Transient occupancy business” includes corporations that advertise residential property for transient occupancy, accept or facilitate the acceptance of rental payments, and then pass a portion of those payments on to the operators of property.

(s) “Very low income” has the same meaning as the term “very low income households” is defined in Section 50105 of the Health and Safety Code.

50535.2.

 The department shall adopt rules, policies, guidelines, or standards to implement this chapter. No rule, policy, guideline, or standard issued by the department in implementing this chapter shall be subject to the requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).

Article  2. Laborforce Housing Assessments

50536.

 (a) For each payment of rent made by a person for transient occupancy in a residential property rented for transient occupancy after January 1, 2024, the operator of the residential property and any transient occupancy business that facilitates the transaction shall be jointly and severally liable for the laborforce housing assessment described in this article.

(b) The laborforce housing assessment shall be equal to __ percent of the rent charged for the transient occupancy. The laborforce housing assessment shall apply in addition to any local tax, fee, or other assessment.

(c) The laborforce housing assessment shall be paid to the department no later than 90 days after the rent is received.

(d) The laborforce housing assessment constitutes a debt owed to the department. The debt is extinguished only upon payment by either the operator or any transient occupancy business.

(e) Every operator and transient occupancy business shall keep and preserve, for at least four years from the date of the rental, records sufficient to enable the department to determine the existence and amount of any laborforce housing assessments owed.

(f) Any operator or transient occupancy business that fails to timely pay any laborforce housing assessment owed to the department shall also owe to the department a penalty of 10 percent of the unpaid amount plus interest on the unpaid amount at the rate of 10 percent per annum.

(g) The department may file suit, in any jurisdiction in which any part of the rent from which the total debt owed arises, against an operator or transient occupancy business, or both, that has failed to pay any laborforce housing assessment, including any penalty or interest owed. The department shall file the suit within four years of the date on which any unpaid laborforce housing assessment was due. Multiple unpaid laborforce housing assessments may be recovered in a single suit.

50536.5.

 All funds received by the department from the laborforce housing assessment established by this article shall be deposited in the Laborforce Housing Fund.

Article  3. Administration of the Laborforce Housing Fund

50537.

 (a) There is hereby established, in the State Treasury, the Laborforce Housing Fund. Notwithstanding Section 13340 of the Government Code, the fund is continuously appropriated to the department without regard to fiscal years for purposes of this chapter.

(b) Revenues deposited in the Laborforce Housing Fund shall only consist of laborforce housing assessments received by the department pursuant to Section 50536.5.

50537.1.

 (a) Public entities, local housing authorities, and mission-driven nonprofit housing providers shall be eligible to receive funding from the Laborforce Housing Fund for the creation of laborforce housing.

(b) Notwithstanding ineligibility under subdivision (a), all housing projects deemed eligible for funding under the “Alternative Models for Permanent Affordable Housing” program, as set forth in section 22.618.3(d)(1)(ii)b of Measure ULA (2022), the Los Angeles Program to Prevent Homelessness and Fund Affordable Housing (“House LA”), or any substantially identical local program, shall be eligible for funding under this chapter.

(c) The department may use revenues deposited in the Laborforce Housing Fund to pay for the administration and collection of the laborforce housing assessments.

50537.2.

 (a) No less than 65 percent of funds allocated in a given year from the Laborforce Housing Fund shall be allocated to the creation of laborforce housing through new construction.

(b) A maximum of 30 percent of the funding allocated from the Laborforce Housing Fund in a given year may be used for the creation of laborforce housing through acquisition and rehabilitation of existing housing.

(c) A maximum of 5 percent of the funding allocated in a given year from the Laborforce Housing Fund may be used to meet the operating needs of laborforce housing projects and for planning and implementation of local laborforce housing or renter protection programs.

50537.3.

 (a) The department shall establish a process for soliciting applications and shall have discretion to award funding from the Laborforce Housing Fund in the manner that the department determines will best effectuate the purposes of this chapter.

(b) The department shall endeavor, to the extent feasible, to award funds collected from the laborforce housing assessments to laborforce housing projects in the counties in which the funds were collected.

Article  4. Labor Standards for Laborforce Housing Projects

50538.

 Revenues from the Laborforce Housing Fund may be used to pay for construction or rehabilitation work on a project only if either of the following is true:

(a) All construction and rehabilitation work is subject to a project labor agreement that requires payment of at least the applicable prevailing wage rate to all construction workers on the project.

(b) The department or a local public agency has obtained an enforceable commitment from the prime contractor or other entity undertaking the work that all contractors and subcontractors at every tier will use a skilled and trained workforce to complete the project.

Article  5. Tenant Protections for Laborforce Housing Projects

50539.

 (a) All of the following protections shall apply to tenants in a property funded under this chapter:

(1) Tenants shall be protected from termination or eviction except for just cause, as defined in Section 1946.2 of the Civil Code, or a more protective local policy, which protections shall be in place from the time the tenancy is created, with no waiting period.

(2) A tenant who qualifies at the time of the creation of the tenancy as income eligible shall not be terminated solely on the basis of a subsequent change in income.

(3) No household or member of a household that resides in the property at the time of its acquisition shall be evicted, nor shall their tenancy be terminated, on the ground of their income or other eligibility requirements for deed-restricted units in the property.

(4) The maximum allowable annual rent increase for any unit shall not exceed the lesser of 3 percent of the rent, or 6 percent of the California Consumer Price Index.

(5) No tenant in a property acquired with funding under this chapter shall be deprived of any rights or protections under state or local law that they enjoyed prior to the time of its acquisition. Tenants shall enjoy full rights of association and free speech, including the right to organize tenant unions, and shall be protected from any act of discrimination, harassment, or retaliation.

(b) Notwithstanding any other state or local law, the department shall require, in the rules, policies, guidelines, or standards adopted pursuant to Section 50535.2, the inclusion of language in tenant leases that incorporates the protections of this section, and in the provisions of Section 1946.2 of the Civil Code or a local policy that provides greater tenant rights against termination.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

SEC. 4.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:

In order to address the statewide affordable housing crisis in California and to prepare for the collection of a laborforce housing assessment and the process for disbursing funds for laborforce housing, it is necessary that this act take effect immediately.

SECTION 1.Section 6300 of the Labor Code is amended to read:

6300.

The California Occupational Safety and Health Act of 1973 is hereby enacted for the purpose of ensuring safe and healthful working conditions for all working Californians by authorizing the enforcement of effective standards, assisting and encouraging employers to maintain safe and healthful working conditions, and by providing for research, information, education, training, and enforcement in the field of occupational safety and health.