This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2019.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 101

Author:(Committee on Budget)

As Amended Ver:June 27, 2019

Majority vote. Budget Bill Appropriation Takes Effect Immediately

SUMMARY:

This is the Housing trailer bill for 2019-20. It contains the necessary changes related to the 2019 Budget Act. Specifically, this bill:

Major Provisions:

Community-Based Transitional Housing

1. Requires the Office of State Audits and Evaluations to conduct an audit instead of an evaluation of the Community-Based Transitional Housing Program and extends the date from May 1, 2019, to May 1, 2020 to provide a copy of the audit to the Joint Legislative Budget Committee.

Housing Element Compliance, Court Remedies, and Accountability

1. Requires prior to the Attorney General bringing any suit for a violation related to housing element compliance and seeking remedies, that the Department of Housing and Community Development (HCD) offer the jurisdiction the opportunity for two meetings in person or via telephone to discuss the violation. Requires HCD to provide the jurisdiction written findings regarding the violation. This provision does not apply to any action filed prior to the effective date of Section 65008. This section becomes operable on July 1, 2019.
2. Requires the Attorney General to request, upon a finding of the court that the housing element does not substantially comply, that the court issue an order or judgment directing the jurisdiction to bring its housing element into compliance. Requires the court to retain jurisdiction to ensure that its order or judgment is carried out, and once the court determines that the housing element substantially complies, provides that the court determination has the same force and effect as HCD's determination that the housing element substantially complies.
   1. Requires, if the jurisdiction has not complied with the order or judgment after 12 months, that the court conduct a status conference. Following the status conference, requires the court to impose fines on the jurisdiction to be deposited into the Building Homes and Jobs Trust Act. Requires any fine levied to be a minimum of $10,000 per month but not to exceed $100,000 per month.
   2. Requires, if the jurisdiction has not complied with the order or judgment after three months following the imposition of fees as described in 3 a), above, that the court conduct a status conference. Provides that the court may multiply the fine determined in 3 a), above, by a factor of three, if the court finds that the fees imposed are insufficient to bring the jurisdiction into compliance with the order or judgment.
   3. Requires, if the jurisdiction has not complied with the order or judgment six months following the imposition of fees, that the court conduct a status conference. Upon a determination that the jurisdiction failed to comply with the order or judgment, the court may impose the following:
      1. Provides that the court may multiply the fines imposed in 3 a), above, by a factor of six, if the court finds that the fees imposed are insufficient to bring the jurisdiction into compliance with the order or judgment.
      2. Provides that the court may order remedies available pursuant to Section 564 of the Code of Civil Procedure, under which an agent of the court may be appointed to bring the jurisdiction's housing element into substantial compliance to remedy identified deficiencies. Requires the court to determine whether the housing element of the jurisdiction substantially complies, and once it does, it has the same force and effect as the HCD's determination that the housing element substantially complies. Requires that an agent appointed by the court have expertise in planning in California.
   4. Provides that in the event that jurisdiction fails to pay fines imposed by the court in 3 a), 3 b) and/or 3 c) above, the court may require the State Controller to intercept any available state and local funds and directs such funds to the Building Homes and Jobs Trust Fund to correct the jurisdiction's failure to pay. Provides that the Controller shall not intercept funds that violate any provision of the California Constitution.
3. Requires the court to consider whether there are any mitigating circumstances delaying a jurisdiction from coming into compliance with state housing law in determining the application of remedies available under three above.
4. Provides that the Office of the Attorney General may seek all remedies available under law.
5. Provides jurisdictions that have adopted a housing element that has been found by the HCD in substantial compliance, additional points or preference in scoring of program applications for the following:
   1. The Affordable Housing and Sustainable Communities Program.
   2. The Transformative Climate Communities Program.
   3. The Infill Incentive Grant Program of 2007.
   4. Additional bonus points may be awarded to other state programs when already allowable under state law.
6. Requires HCD to designate jurisdictions as prohousing pursuant to emergency regulations and report these designations to the Office of Planning and Research, and any other applicable agency or department, annually and upon request.
7. Requires HCD in collaboration with stakeholders to adopt emergency regulations by July 1, 2021.
8. Requires the Department of Finance to publish on its website the list of programs included in eight above, by January 1, 2021, and annually.
9. Requires the HCD to post on its website each month a list of jurisdictions that have failed to adopt housing element that has been found by HCD to be in substantial compliance. Requires HCD on an annual basis, on July 1, or upon request to provide the most recent version of the list to the Office of Planning and Research and any other applicable agency or department.
10. Requires HCD to notify the jurisdiction of its inclusion upon the first occurrence, if the jurisdiction is included on the list. Requires a copy of all notifications to be submitted to the legislative body of the jurisdiction.
11. Requires the Department of Finance, on or before January 1, 2023, to publish on its website a list of program, if any, where eligibility for funding is contingent on the jurisdiction having a substantially compliant housing element. If Department of Finance puts that list out, then HCD is required to do the following:
    1. Offer the jurisdiction the two meetings in person or via telephone to discuss the jurisdiction's failure to adopt a housing element that is found to be in substantial compliance and requires HCD to provide written findings regarding that failure to the jurisdiction.
    2. Provide within 30 days a jurisdiction both appearing on the list and having adopted a housing element, a jurisdiction may request, in writing, that HCD review de novo the jurisdiction's last housing element. Provides that within 30 days of receipt of the request, HCD shall issue written findings as to whether the housing element has been found by HCD to be in substantial compliance. If HCD's written findings state that the jurisdiction's housing element is not in substantial compliance, then the city, county, or city and county may, within 30 days, bring an action to superior court to challenge HCD's determination.
12. Provides that Section 65589.11 does not apply to any action that is filed on or before the effective date.

Low Barrier Navigation Center

1. Defines "Low Barrier Navigation Center" to mean a Housing First, low-barrier, service-enriched shelter focused on moving people into permanent housing that provides temporary living facilities while case managers connect individuals experiencing homelessness to income, public benefits, health services, shelter and housing.
2. Defines "Low Barrier" to mean best practices to reduce barriers to entry, and may include, but is not limited to, the following:
   1. The presence of partners if it is not a population-specific site, such as for survivors of domestic violence or sexual assault.
   2. Pets.
   3. The Storage of possessions.
   4. Privacy, such as partitions around beds in a dormitory setting or in larger rooms containing more than two beds, or private rooms.
3. Provides that a low barrier navigation center development is a use by right in areas zoned for mixed use and nonresidential zones permitting multifamily uses. A local jurisdiction shall permit a Low Barrier Navigation Center development if they meet specified requirements.
4. Requires the local jurisdiction to notify a developer within 30 days of receipt of an application, whether the developer's application is complete. Requires that within 60 days of the receipt of a completed application for Low Barrier Navigation Center development, the local jurisdiction shall act upon its review of the application.
5. Provides that this article is only in effect until January 1, 2027, and then it is repealed.

SB 35 Clean-up

1. Requires that the calculations to determine whether or not a project qualifies for a streamlined approval process based on the square footage of the project devoted to residential use include additional density, floor area, units, and other concessions granted pursuant to the existing Density Bonus Law.
2. Prohibits a project from being sited on a hazardous waste site unless the site has been cleared for residential use by the State Department of Public Health, State Water Resources Control Board, or the Department of Toxic Substances Control.

Homeless Housing, Assistance, and Prevention Program

1. Creates the Homeless Housing, Assistance, and Prevention Program to provide jurisdictions with one-time grants funds to support regional coordination and expand or develop local capacity to address immediate homelessness challenges and appropriates $650 million as follows:
   1. $190 million to Continuums of Care (CoCs) based on each CoCs' proportionate share of the state's total homeless population, based on the homeless point-in-time count.
   2. $275 million to each city, or city that is also a county that has a population of 300,000 or more, based on the homeless point-in-time count.
   3. $175 million to each county based on the homeless point-in-time count.
2. Requires the Business, Consumer Services and Housing Agency (Agency) to administer the program to provide grant funds to cities, counties and CoCs. Provides that no more than 5% of the funds available shall be used for state operations.
3. Requires the agency to make available to the public on its website records of the following:
   1. The number of applications for program funding received by the Agency.
   2. The number of applications for programs funded denied by the Agency.
   3. The name of each recipient of program funds.
   4. Each applicant receiving funds shall provide a list of all awards to subrecipients.
   5. Annual reports filed by recipients.
4. Prvides that a program recipient shall not use funding from the program to supplant existing local funds for homeless housing, assistance, or prevention.
5. Requires a program recipient to use at least 8% of the funds for services for homeless youth populations.
6. Requires an applicant to apply for a program application pursuant to a specified timeline and in a manner prescribed by the Agency, including, but not limited to, the following:
   1. If an applicant is a CoC, data on the demographics and characteristics of the homeless populations in the jurisdiction and on the current programs providing housing and homeless services in the jurisdiction.
   2. For a city or a county applying for funds, a plan demonstrating how these funds will complement the regional needs described by the CoC's plan for a coordinated housing and service system that meets the needs of individuals, unaccompanied youth, and families experiencing homelessness.
7. Provides that a recipient shall expend funds on evidence-based solutions that address and prevent homelessness among eligible populations including any of the following:
   1. Rental assistance and rapid rehousing.
   2. Operating subsidies in new and existing affordable or supportive housing units, emergency shelters, and navigation centers. Operating subsidies may include operating reserves.
   3. Incentives to landlords, including, but not limited to, security deposits and holding fees.
   4. Outreach and coordination, which may include access to job programs, to assist vulnerable populations including families and homeless youth.
   5. Systems support for activities necessary to create regional partnerships and maintain a homeless services and housing delivery system.
   6. Delivery of permanent housing and innovative housing solutions such as hotel and motel conversions.
   7. Prevention and shelter diversion to permanent housing.
   8. New navigation centers and emergency shelters based on demonstrated need as follows:
      1. The number of available shelter beds in the city, county, or region served by a CoC.
      2. Shelter vacancy rate in the summer and winter months.
      3. Percentage of exits from emergency shelters to permanent housing solutions.
      4. A plan to connect residents to permanent housing.
8. Allows up to 5% of an applicant's program to be expended on the following:
   1. Strategic homelessness plan.
   2. Infrastructure development to support coordinated entry systems and Homeless Management Information Systems.

Local Government Planning Support Grants Program

1. Creates the Local Government Planning Support Grants Program, to be administered by the Department of Housing and Community Development (HCD) for the purpose of providing regions and jurisdictions with one-time funding to be used to for planning activities. Allocates $250 million, as follows:
   1. $125 million to councils of governments (COGs), specified counties, and other regional entities to increase housing planning and accelerate housing production, which may include developing and improving the regional housing needs assessment (RHNA) methodology for the sixth cycle, suballocating moneys to jurisdictions or other subregional entities in the form of grants for planning purposes, and providing jurisdictions and local agencies with technical assistance for updating planning and zoning documents.
   2. $125 million to jurisdictions to assist in planning for other activities related to meeting the sixth cycle RHNA, based on the population size of that jurisdiction. Grants may be used for rezoning and encouraging development by updating planning documents and zoning ordinances, completing environmental clearances, establishing a workforce housing opportunity zone or a housing sustainability district, performing infrastructure planning, identifying excess property for residential development, revamping local planning processes, developing or improving an accessory dwelling unit ordinance in compliance with state law, and covering of costs of temporary staffing or consultants needed for these purposes.
2. Requires HCD, in collaboration with the Governor's Office of Planning and Research (OPR), after engaging in stakeholder participation, to develop, by December 31, 2022, a recommended improved regional housing need allocation process and methodology that promotes and streamlines housing development, and to submit a report of its findings and recommendations to the Legislature.

Joe Serna, Jr. Farmworker Housing Grant Program

1. Requires HCD for multifamily housing loans made pursuant to the Joe Serna, Jr. Farmworker Housing Grant Program, to make annual loan payments in the minimum amount necessary to cover the costs of the project monitoring.
2. Removes the matching funds requirements for the Joe Serna, Jr. Farmworker Housing Grant Program.
3. Decreases the amount in the Joe Serna, Jr. Farmworker Housing Grant Fund that HCD is authorized to set aside to 1.5% of funds available.

CalHome Program

1. Authorizes HCD to make CalHome Program grants to local agencies or nonprofit associations for the construction, repair, reconstruction, or rehabilitation of accessory dwelling units and junior accessory dwelling units.
2. Authorizes HCD to use appropriated funds to make CalHome Program grants to local agencies or nonprofit corporations to assist households at or below 120% of area median income and that are victims of a disaster, if one of the following occurs with respect to the county in which the household's residence is located:
   1. The Governor has proclaimed a state of emergency resulting from a disaster.
   2. A special appropriation of federal emergency supplemental assistance or a presidential declaration of disaster occurred.
3. Requires HCD to review, adopt, amend, and repeal guidelines to implement the making of CalHome Program grants.
4. Requires HCD to approve any alterations of underwriting guidelines by applicants with respect to how the applicants will ensure participation by low-income households in making loans in response to a disaster.

Local Housing Trust Fund

1. Authorizes HCD to make matching grants available under the Local Housing Trust Fund Matching Grant program to Native American tribes and authorizes the department to adopt guidelines to implement the program.
2. Authorizes HCD to increase the minimum allocation above $500,000 to an applicant that is a newly established trust and increase the minimum allocation to all other trusts above $1,000,000.
3. Provides that the matching fund requirement does not apply to specified funds allocated under the Building Homes and Jobs Act that are used to capitalize a regional housing trust fund.
4. Authorizes the applicant to provide evidence of a legally binding commitment to deposit matching funds.
5. Requires HCD to set aside funding for new trusts as defined by guidelines.
6. Authorizes HCD to allow grantees under the program to use up to 5% of the grant award for administrative costs.
7. Extends the period in which funds are required to be encumbered from 36 months to 60 months.

Infill Infrastructure Grant Program of 2019

1. Creates the Infill Infrastructure Grant (IIG) Program of 2019, similar to the 2007 Infill Incentive Program, to be administered by HCD to fund infrastructure improvements like water, sewer, other utility service improvements, streets, roads, other transit linkages, sidewalks, and other streetscape improvements for eligible cities and counties. Allocates $500 million, as follows:
   1. $410 million to fund a competitive grant process for large jurisdictions.  Eligible applicants within large jurisdictions are defined as any county over 250,000 in population, and any city within that county.
   2. $90 million to fund an over-the-counter process for small jurisdictions.  Eligible applicants within small jurisdictions are defined as any county less than 250,000 in population, and any city within that county.
2. Eligible applicants must demonstrate a compliant housing element, be current on submittal of the annual progress report, and the infrastructure improvements must support housing, which includes a 15% affordability requirement.

Low Income Housing Tax Credit Program

1. Makes the Executive Director of CalHFA and the Director of the Department of Housing and Community Development voting members of the California Tax Credit Allocation Committee.
2. Provides for the allocation of $500 million in new state low-income housing tax credits for new construction projects that receive the federal 4% tax credit, and increases the eligible basis for these projects to 30%.
3. Requires at least $300 million of this to be available to new construction projects receiving the federal 4% tax credit. Allows up to $200 million to be available to projects receiving assistance from the California Housing Finance Agency (CalHFA) Mixed Income Program.
4. Provides that in 2020 projects will follow the existing volume cap and 4% federal tax credit allocation criteria, and requires the California Tax Credit Allocation Committee to develop a new methodology to award allocations for 2021 and thereafter.
5. Lifts the $75,000 cap on state housing tax credits allowed to be claimed per calendar year by each individual, including for those tax credits allocated via the legacy program not funded through this bill.
6. Makes permanent the ability of developers to sell the credits to an unrelated investor, rather than requiring the investor to be a partner in the development. Also makes permanent the ability of a developer to sell state credits to investors who are not also buying federal tax credits.
7. Provides a 95% eligible basis boost to certain preservation projects eligible through the legacy tax credit program not funded through this bill.

Mixed Income Program

1. Appropriates $500 million for CalHFA's Mixed Income Program, which provides financing for mixed-income housing developments.

Housing First Parolee Programs

1. Requires programs that fund recovery housing to comply with Housing First principles by July 1, 2020 instead of July 1, 2019.
2. Requires departments that operate such facilities to consult with the legislature, the Business, Consumer Services, and Housing Agency, and program stakeholders on ways to improve the provision of housing to program participants in the interim.
3. Requires departments that operate such programs to report to the Senate and Assembly Budget Committees by March 1, 2020, on efforts to improve the provision of housing to program participants generally, and to comply with Housing First specifically.

The Senate Amendments:

COMMENTS:

1. This bill is a budget trailer bill within the overall 2019-20 budget package to implement actions related to housing.
2. The additional judicial remedies in this act are intended to be used only as a last resort where a jurisdiction has continued to not fulfill its responsibilities under housing element law and disregards the direction of the court.

According to the Author:

Arguments in Support:

None on file.

Arguments in Opposition:

None on file.

FISCAL COMMENTS:

This bill includes continuously appropriated funds and appropriates $500 million for CalHFA's Mixed Income Program.

VOTES:

ASSEMBLY FLOOR: 54-13-13

YES: Aguiar-Curry, Bauer-Kahan, Bloom, Boerner Horvath, Bonta, Burke, Calderon, Carrillo, Cervantes, Chau, Chu, Cooper, Daly, Eggman, Frazier, Friedman, Gabriel, Cristina Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Limón, Maienschein, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Weber, Wicks, Wood, Rendon

NO: Bigelow, Brough, Dahle, Flora, Fong, Gallagher, Kiley, Mathis, Melendez, Obernolte, Patterson, Voepel, Waldron

ABS, ABST OR NV: Arambula, Berman, Chen, Chiu, Choi, Cooley, Cunningham, Diep, Eduardo Garcia, Lackey, Levine, Low, Mayes

UPDATED:

VERSION: June 27, 2019

CONSULTANT: Genevieve Morelos / BUDGET / (916) 319-2099 FN: 0001189

 THIRD READING  

Bill No: AB 101

Author: Committee on Budget

Amended: 6/27/19 in Senate

Vote: 21

SENATE BUDGET & FISCAL REVIEW COMMITTEE: 15-0, 7/1/19

AYES: Mitchell, Nielsen, Durazo, Hurtado, Jones, Monning, Moorlach, Morrell, Pan, Roth, Skinner, Stern, Stone, Umberg, Wieckowski

NO VOTE RECORDED: Beall, Leyva, McGuire

ASSEMBLY FLOOR: Not relevant

SUBJECT: Housing development and financing

SOURCE: Author

DIGEST:

This bill provides for statutory changes necessary to enact the housing and homelessness-related provisions of the Budget Act of 2019.

ANALYSIS: This bill makes the following statutory changes:

1. Community-Based Transitional Housing Program Audit. This bill requires the State Office of Audits and Evaluation to audit the Community-Based Transitional Housing Program, which provides grants to local jurisdictions to increase the supply of transitional housing available to recent parolees, and to report the results of the audit to the Joint Legislative Budget Committee by May 1, 2020. Current law requires the Office of State Audits and Evaluations to complete the audit and to report to the Joint Legislative Budget Committee by May 1, 2019.
2. Housing Element Compliance, Court Remedies, and Accountability. This bill provides for certain judicial remedies for violations of the Planning and Zoning Law. Current law authorizes the Department of Housing and Community Development (HCD) to refer violations of housing element law committed by a local jurisdiction to the Attorney General.

This bill requires HCD to offer the jurisdiction the opportunity for two meetings in person or via telephone to discuss the violation and to provide the jurisdiction written findings regarding the violation prior to allowing the Attorney General to bring suit against the jurisdiction. It then allows the Attorney General to seek, and a court to allow, certain remedies when the court finds that a local jurisdiction is not substantially compliant with housing element law.

Specifically, this bill requires the Attorney General to request, upon a finding of the court that the housing element does not substantially comply, that the court issue an order or judgement directing the jurisdiction to bring its housing element into compliance, and requires the court to retain jurisdiction to ensure that its order or judgement is carried out. Once the court determines that the housing element substantially complies, this bill provides that the court determination has the same force and effect as HCD’s determination that the housing element substantially complies.

This bill requires, if the jurisdiction has not complied with the order or judgement after 12 months, the court to conduct a status conference. Following the status conference, it requires the court to impose fines on the jurisdiction to be deposited into the Building Homes and Jobs Trust Fund. It requires any fine levied to be between $10,000 and $100,000 per month. If the jurisdiction fails to complied with the order or judgment after three months following the imposition of fines as described above, it would require the court conduct a status conference. Following this conference, it provides that the court may multiply the fine described above by a factor of three, if the court finds that the fines imposed are insufficient to bring the jurisdiction into compliance with the order or judgement.

This bill requires that, if the jurisdiction has not complied with the order or judgement six months following the initial imposition of fines, the court conduct a status conference. Upon a determination that the jurisdiction failed to comply with the order or judgement, it permits the court to multiply the initial fines described above by a factor of six, if the court finds that the fines imposed are insufficient to bring the jurisdiction into compliance with the order or judgement. It also allows the court to additionally order remedies available pursuant to Section 564 of the Code of Civil Procedure, under which an agent of the court may be appointed to bring the jurisdiction’s housing element into substantial compliance to remedy identified deficiencies. This bill requires that an agent appointed by the court have expertise in planning in California.

This bill allows, in the event that jurisdiction fails to pay fines imposed by the court as described above, the court to require the State Controller to intercept any available state and local funds and direct such funds to the Building Homes and Jobs Trust Fund to correct the jurisdiction’s failure to pay. This bill provides that any intercept so ordered not violate any provision of the California Constitution. This bill requires the court to consider whether there are any mitigating circumstances delaying a jurisdiction from coming into compliance with state housing law in determining the application of the remedies described above.

Additionally, this bill creates a “pro-housing policy” incentive scoring system for certain competitive state-funded housing grant programs, including the Affordable Housing and Sustainable Communities program, the Transformative Climate Communities program, and the Infill Infrastructure Grant program. It requires HCD to identify a set of policies identified as “pro-housing,” and to designate local jurisdictions as pro-housing based on their adoption of these policies. It requires the departments operating the identified programs to award jurisdictions designated as pro-housing additional points in scoring their applications for awards from these programs.

1. Low Barrier Navigation Centers. This bill makes statutory changes to streamline approval of low-barrier navigation centers. Specifically, this bill defines low-barrier navigation centers as high-quality, low-barrier, service-enriched shelters focused on moving people into permanent housing while connecting them with services. It, until January 1, 2027, requires low barrier navigation center developments to be a use by-right, as defined, in areas zoned for mixed uses and nonresidential zones permitting multifamily uses if the development meets certain requirements.
2. SB 35 Clean Up. This bill requires that the calculations to determine whether or not a project qualifies for a streamlined approval process based on the square footage of the project devoted to residential use include additional density, floor area, units, and other concessions granted pursuant to the existing Density Bonus Law. It also prohibits such a project from being sited on a hazardous waste site unless the site has been cleared for residential use by the State Department of Public Health, State Water Resources Control Board, or the Department of Toxic Substances Control.
3. Homeless Housing, Assistance, and Prevention Program. This bill provides for the distribution of $650 million in funds to assist local governments in addressing homelessness. Specifically, provides that $275 million be provided to cities with a population greater than 300,000 individuals, $175 million to counties, and $190 million to HUD-designated Continuums of Care. Defines each jurisdiction’s share of the funds as based on their share of the 2019 Point in Time count of homeless individuals unless a jurisdiction can demonstrate that a significant change in methodology occurred since the last Point in Time count. Defines eligible uses as activities that prevent homelessness, provide support to homeless individuals, and help move homeless individuals to permanent housing. Requires applicants for funds to demonstrate efforts at regional coordination in their application, and to demonstrate how the requested funds will close existing gaps in addressing homelessness. Places certain reporting requirements on jurisdictions receiving these funds.
4. Local Government Planning Support Grants Program. This bill provides for the division of $250 million in planning grants between regional governing entities and local jurisdictions. Specifically, this bill provides $125 million to regional entities and $125 million to local jurisdictions for technical assistance, preparation and adoption of planning documents, and process improvements to accelerate housing production and facilitate compliance to implement the sixth cycle of the Regional Housing Need Assessment process.
5. Joe Serna, Jr. Farmworker Housing Program. This bill allows the Program to charge an annual monitoring fee, not to exceed 0.42 percent of annual loan payment amounts, to fund ongoing monitoring and compliance work. Removes a requirement for matching funds, and lower the amount of funding required to be set aside in case of loan defaults to 1.5 percent. These changes aligns the Program with other multifamily housing programs at HCD.
6. CalHome Program. This bill allows the CalHome Program to include auxiliary dwelling units and junior accessory dwelling units, and to authorize the Program to make grants for housing purposes in declared disaster areas. Specifically, this bill includes a provision to serve moderate income families in disaster areas only. The language requires awardees (local government and nonprofits) who serve moderate income households to demonstrate to HCD how they will continue to serve low-income households.
7. Local Housing Trust Fund Program. This bill allows the Local Housing Trust Fund to make matching grants to Native American Tribes, and to increase the minimum size of awards to various local trusts. Under current law, the minimum allocation is $500,000 for newly-established housing trusts and $1 million for trusts that have previously received funds from the program. The maximum allocation is $2 million for new trusts and $1 million for trusts that have previously received funds through the program. This bill allows HCD to increase the minimum program allocation above $500,000 and $1 million as appropriate.
8. Infill Infrastructure Grant Program of 2019. This bill provides for the distribution of $500 million in grants to fund infrastructure improvements like water, sewer, other utility service improvements, streets, roads, other transit linkages, sidewalks, and other streetscape improvements for eligible cities and counties. This bill provides that $90 million shall be set aside for an over the counter program for counties with a population of less than 250,000 as of January 1, 2019, or any city within those counties, and $410 million for a competitive grant program for larger jurisdictions. This bill requires eligible applicants to demonstrate a compliant housing element, be current on submittal of the annual progress report, and show that the infrastructure improvements that will be funded by this Program support housing, which includes a 15 percent affordability requirement.
9. Low Income Housing Tax Credits Program. This bill provides for the allocation of $500 million in new state low-income housing tax credits for new construction projects that receive the federal four percent tax credit. For these new credits, this bill increases the eligible basis for these projects from 13 percent to 30 percent. It requires at least $300 million of this to be available to new construction projects receiving the federal four percent tax credit, and allows up to $200 million to be available to projects receiving assistance from the California Housing Finance Agency (CalHFA) Mixed Income Program.

Additionally, it provides that in calendar year 2020, projects will follow the project volume cap and four percent federal tax credit allocation criteria required under current law, and requires the California Tax Credit Allocation Committee to develop a new methodology to award allocations for the 2021 calendar year and each year thereafter. It lifts the $75,000 cap on state housing tax credits that are allowed to be claimed per calendar year by each individual, including for those tax credits allocated via the legacy program not funded through this bill. It makes permanent the ability of developers to sell the credits to an unrelated investor, rather than requiring the investor to be a partner in the development. It also makes permanent the ability of a developer to sell state credits to investors who are not also buying federal tax credits. It provides a 95 percent eligible basis boost to certain preservation projects eligible through the legacy tax credit program not funded through this bill. Lastly, it makes the Executive Director of CalHFA and the Director of HCD voting members of the California Tax Credit Allocation Committee.

1. Housing First Parolee Programs. This bill requires programs that fund recovery housing to comply with Housing First principles by July 1, 2020 instead of July 1, 2019. It requires departments that operate such facilities to consult with the Legislature, the Business, Consumer Services, and Housing Agency, and program stakeholders on ways to improve the provision of housing to program participants in the interim. It requires departments that operate such programs to report to the Senate and Assembly Budget Committees by March 1, 2020, on efforts to improve the provision of housing to program participants generally, and to comply with Housing First specifically.
2. Mixed Income Program. This bill appropriates $500 million for CalHFA’s Mixed Income Program, which provides financing for mixed-income housing developments.

FISCAL EFFECT: Appropriation: Yes Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 6/28/19)

None received

OPPOSITION: (Verified 6/28/19)

None received

Prepared by: James Hacker / B. & F.R. / 916-651-4103

7/1/19 14:13:20

**** END ****

SENATE COMMITTEE ON BUDGET AND FISCAL REVIEW

Senator Holly Mitchell, Chair

2019 - 2020 Regular

Bill No: AB 101 Hearing Date: July 1, 2019

Subject: Housing development and financing

Summary:

Provides for statutory changes necessary to enact the housing and homelessness-related provisions of the Budget Act of 2019.

Background:

As part of the 2019-20 budget package, AB 101 makes statutory changes to implement the budget act.

Proposed Law:

This bill makes the following statutory changes:

1. Community-Based Transitional Housing Program Audit. This bill would require the state Office of Audits and Evaluation to audit the Community-Based Transitional Housing Program, which provides grants to local jurisdictions to increase the supply of transitional housing available to recent parolees, and to report the results of the audit to the Joint Legislative Budget Committee by May 1, 2020. Current law requires the Office of State Audits and Evaluations to complete the audit and to report to the Joint Legislative Budget Committee by May 1, 2019.
2. Housing Element Compliance, Court Remedies, and Accountability. This bill would provide for certain judicial remedies for violations of the Planning and Zoning Law. Current law authorizes the Department of Housing and Community Development (HCD) to refer violations of housing element law committed by a local jurisdiction to the Attorney General.

This bill would require HCD to offer the jurisdiction the opportunity for two meetings in person or via telephone to discuss the violation and to provide the jurisdiction written findings regarding the violation prior to allowing the Attorney General to bring suit against the jurisdiction. It would then allow the Attorney General to seek, and a court to allow, certain remedies when the court finds that a local jurisdiction is not substantially compliant with housing element law.

Specifically, this bill would require the Attorney General to request, upon a finding of the court that the housing element does not substantially comply, that the court issue an order or judgement directing the jurisdiction to bring its housing element into compliance, and would require the court to retain jurisdiction to ensure that its order or judgement is carried out. Once the court determines that the housing element substantially complies, this bill would provide that the court determination has the same force and effect as HCD’s determination that the housing element substantially complies.

This bill would require, if the jurisdiction has not complied with the order or judgement after 12 months, the court to conduct a status conference. Following the status conference, it would require the court to impose fines on the jurisdiction to be deposited into the Building Homes and Jobs Trust Fund. It would require any fine levied to be between $10,000 and $100,000 per month. If the jurisdiction fails to complied with the order or judgment after three months following the imposition of fines as described above, it would require the court conduct a status conference. Following this conference, it would provide that the court may multiply the fine described above by a factor of three, if the court finds that the fines imposed are insufficient to bring the jurisdiction into compliance with the order or judgement.

This bill would require that, if the jurisdiction has not complied with the order or judgement six months following the initial imposition of fines, the court conduct a status conference. Upon a determination that the jurisdiction failed to comply with the order or judgement, it would permit the court to multiply the initial fines described above by a factor of six, if the court finds that the fines imposed are insufficient to bring the jurisdiction into compliance with the order or judgement. It would also allow the court to additionally order remedies available pursuant to Section 564 of the Code of Civil Procedure, under which an agent of the court may be appointed to bring the jurisdiction’s housing element into substantial compliance to remedy identified deficiencies. This bill would require that an agent appointed by the court have expertise in planning in California.

This bill would allow, in the event that jurisdiction fails to pay fines imposed by the court as described above, the court to require the State Controller to intercept any available state and local funds and direct such funds to the Building Homes and Jobs Trust Fund to correct the jurisdiction’s failure to pay. This bill would provide that any intercept so ordered not violate any provision of the California Constitution. This bill would require the court to consider whether there are any mitigating circumstances delaying a jurisdiction from coming into compliance with state housing law in determining the application of the remedies described above.

Additionally, this bill creates a “pro-housing policy” incentive scoring system for certain competitive state-funded housing grant programs, including the Affordable Housing and Sustainable Communities program, the Transformative Climate Communities program, and the Infill Infrastructure Grant program. It would require HCD to identify a set of policies identified as “pro-housing,” and to designate local jurisdictions as pro-housing based on their adoption of these policies. It would require the departments operating the identified programs to award jurisdictions designated as pro-housing additional points in scoring their applications for awards from these programs.

1. Low Barrier Navigation Centers. This bill makes statutory changes to streamline approval of low-barrier navigation centers. Specifically, this bill defines low-barrier navigation centers as high-quality, low-barrier, service-enriched shelters focused on moving people into permanent housing while connecting them with services. It would, until January 1, 2027, require low barrier navigation center developments to be a use by-right, as defined, in areas zoned for mixed uses and nonresidential zones permitting multifamily uses if the development meets certain requirements.
2. SB 35 Clean Up. This bill would require that the calculations to determine whether or not a project qualifies for a streamlined approval process based on the square footage of the project devoted to residential use include additional density, floor area, units, and other concessions granted pursuant to the existing Density Bonus Law. It would also prohibit such a project from being sited on a hazardous waste site unless the site has been cleared for residential use by the State Department of Public Health, State Water Resources Control Board, or the Department of Toxic Substances Control.
3. Homeless Housing, Assistance, and Prevention Program. This bill would provide for the distribution of $650 million in funds to assist local governments in addressing homelessness. Specifically, provides that $275 million be provided to cities with a population greater than 300,000 individuals, $175 million to counties, and $190 million to HUD-designated Continuums of Care. Defines each jurisdiction’s share of the funds as based on their share of the 2019 Point in Time count of homeless individuals unless a jurisdiction can demonstrate that a significant change in methodology occurred since the last Point in Time count. Defines eligible uses as activities that prevent homelessness, provide support to homeless individuals, and help move homeless individuals to permanent housing. Requires applicants for funds to demonstrate efforts at regional coordination in their application, and to demonstrate how the requested funds will close existing gaps in addressing homelessness. Places certain reporting requirements on jurisdictions receiving these funds.
4. Local Government Planning Support Grants Program. This bill would provide for the division of $250 million in planning grants between regional governing entities and local jurisdictions. Specifically, the bill provides $125 million to regional entities and $125 million to local jurisdictions for technical assistance, preparation and adoption of planning documents, and process improvements to accelerate housing production and facilitate compliance to implement the sixth cycle of the Regional Housing Need Assessment (RHNA) process.
5. Joe Serna, Jr. Farmworker Housing Program. This bill would allow the program to charge an annual monitoring fee, not to exceed 0.42 percent of annual loan payment amounts, to fund ongoing monitoring and compliance work. Would remove a requirement for matching funds, and lower the amount of funding required to be set aside in case of loan defaults to 1.5 percent. These changes would align the Serna Program with other multifamily housing programs at HCD.
6. CalHome Program. This bill would allow the CalHome program to include auxiliary dwelling units (ADUs) and junior accessory dwelling units, and to authorize the program to make grants for housing purposes in declared disaster areas. Specifically, this bill includes a provision to serve moderate income families in disaster areas only. The language requires awardees (local government and nonprofits) who serve moderate income households to demonstrate to HCD how they will continue to serve low-income households.
7. Local Housing Trust Fund Program. This bill would allow the Local Housing Trust Fund to make matching grants to Native American Tribes, and to increase the minimum size of awards to various local trusts. Under current law, the minimum allocation is $500,000 for newly-established housing trusts and $1,000,000 for trusts that have previously received funds from the program. The maximum allocation is $2,000,000 for new trusts and $1,000,000 for trusts that have previously received funds through the program. This bill would allow the Department to increase the minimum program allocation above $500,000 and $1,000,000 as appropriate.
8. Infill Infrastructure Grant Program of 2019. This bill would provide for the distribution of $500 million in grants to fund infrastructure improvements like water, sewer, other utility service improvements, streets, roads, other transit linkages, sidewalks, and other streetscape improvements for eligible cities and counties. This bill provides that $90 million shall be set aside for an over the counter program for counties with a population of less than 250,000 as of January 1, 2019, or any city within those counties, and $410 million for a competitive grant program for larger jurisdictions. This bill would require eligible applicants to demonstrate a compliant housing element, be current on submittal of the annual progress report, and show that the infrastructure improvements that would be funded by this program support housing, which includes a 15 percent affordability requirement.
9. Low Income Housing Tax Credits Program. This bill would provide for the allocation of $500 million in new state low-income housing tax credits for new construction projects that receive the federal 4 percent tax credit. For these new credits, the bill would increase the eligible basis for these projects from 13 percent to 30 percent. It would require at least $300 million of this to be available to new construction projects receiving the federal 4 percent tax credit, and would allow up to $200 million to be available to projects receiving assistance from the California Housing Finance Agency (CalHFA) Mixed Income Program.

Additionally, it would provide that in calendar year 2020, projects will follow the project volume cap and 4 percent federal tax credit allocation criteria required under current law, and would require the California Tax Credit Allocation Committee to develop a new methodology to award allocations for the 2021 calendar year and each year thereafter. It would lift the $75,000 cap on state housing tax credits that are allowed to be claimed per calendar year by each individual, including for those tax credits allocated via the legacy program not funded through this bill. It would make permanent the ability of developers to sell the credits to an unrelated investor, rather than requiring the investor to be a partner in the development. It would also make permanent the ability of a developer to sell state credits to investors who are not also buying federal tax credits. It would provide a 95 percent eligible basis boost to certain preservation projects eligible through the legacy tax credit program not funded through this bill. Lastly, it would make the Executive Director of the California Housing Finance Agency and the Director of the Department of Housing and Community Development voting members of the California Tax Credit Allocation Committee.

1. Housing First Parolee Programs. This bill would require programs that fund recovery housing to comply with Housing First principles by July 1, 2020 instead of July 1, 2019. It would require departments that operate such facilities to consult with the Legislature, the Business, Consumer Services, and Housing Agency, and program stakeholders on ways to improve the provision of housing to program participants in the interim. It would require departments that operate such programs to report to the Senate and Assembly Budget Committees by March 1, 2020, on efforts to improve the provision of housing to program participants generally, and to comply with Housing First specifically.
2. Mixed Income Program. This bill would appropriate $500 million for CalHFA’s Mixed Income Program, which provides financing for mixed-income housing developments.

Fiscal Effect:

The funding related to the changes in this bill is contained in the 2019-20 budget.

Support:

None on file.

Opposed:

None on file.

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ASSEMBLY THIRD READING

ATR Bill Id:AB 101

Author:(Ting)

As Introduced Ver:December 3, 2018

Majority vote. Budget Bill Appropriation Takes Effect Immediately

SUMMARY:

This bill expresses the intent of the Legislature to enact statutory changes relating to the Budget Act of 2019.

Major Provisions

COMMENTS:

According to the Author:

Arguments in Support:

Arguments in Opposition:

FISCAL COMMENTS:

VOTES:

UPDATED:

VERSION: December 3, 2018

CONSULTANT: Christian Griffith / BUDGET / (916) 319-2099 FN: 0000144