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SB-102 Public health omnibus.(2019-2020)

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SB102:v96#DOCUMENT

Amended IN Assembly June 22, 2020

Amended IN Assembly June 27, 2019

Amended IN Assembly June 20, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill

No. 102

Introduced by Committee on Budget and Fiscal Review

January 10, 2019

An act to amend Sections 30035.7, 65400, 65585, and 65913.4 of, to add Sections 65589.9 and 65589.11 to, and to add and repeal Article 12 (commencing with Section 65660) of Chapter 3 of Division 1 of Title 7 of, the Government Code, to amend Sections 50199.8, 50517.5, 50517.6, 50517.7, 50650, 50650.3, 50650.4, 50843.5, and 53545.13 of, to add Chapter 6 (commencing with Section 50216) to Part 1 of Division 31 of, to add Chapter 3.1 (commencing with Section 50515) to Part 2 of Division 31 of, and to add Part 12.5 (commencing with Section 53559) to Division 31 of, the Health and Safety Code, to add Sections 75218.1 and 75244 to the Public Resources Code, to amend Sections 12206, 17058, 17561, 23610.5, and 24692 of the Revenue and Taxation Code, and to amend Section 8256 of the Welfare and Institutions Code, relating to housing, and making an appropriation therefor, to take effect immediately, bill related to the budget. Section 100500 of the Government Code, to amend Sections 1367.0085, 1386, 105250.1, 120962, 120972, 127671, and 127672 of, to amend the heading of Chapter 8.5 (commencing with Section 127671) of Part 2 of Division 107 of, to add Sections 127671.1, 127672.8, 127672.9, 127673.1, 127673.2, 127673.3, 127673.4, 127673.5, 127673.6, 127673.7, 127673.8, 127673.81, 127673.82, 127673.83, 127673.84, and 127674.1 to, to repeal Sections 120512, 120780.6, 122441, and 127671.5 of, and to repeal and add Sections 127673 and 127674 of, the Health and Safety Code, to amend Section 10112.296 of, and to add Chapter 4.1 (commencing with Section 10403) to Part 2 of Division 2 of, the Insurance Code, to amend Section 19548.2 of the Revenue and Taxation Code, and to amend Sections 4107, 4300, 4301, 4305, 4306, 4307, 4308, 4309, 4314, 14007.8, 14011.10, 14021.51, 14042.1, 14046, 14046.1, 14079, 14105.31, 14124.24, 14134, 14188, and 14188.1 of, to amend and repeal Section 14133.22 of, to add Sections 14105.334, 14105.467, 14124.12, and 14301.11 to, to repeal Section 4315 of, and to repeal and add Sections 14046.8 and 14188.4 of, the Welfare and Institutions Code, relating to health, and making an appropriation therefor, to take effect immediately, bill related to the budget.

LEGISLATIVE COUNSEL'S DIGEST

SB 102, as amended, Committee on Budget and Fiscal Review. ~~Housing development and financing.~~ Public health omnibus.

(1) Existing federal law, the federal Patient Protection and Affordable Care Act (PPACA), enacts various health care coverage market reforms that took effect January 1, 2014. Among other things, PPACA requires each state to establish an American Health Benefit Exchange that facilitates the purchase of qualified health plans by qualified individuals and qualified small employers. Existing state law establishes the California Health Benefit Exchange (the Exchange) within state government, known as Covered California, specifies the powers and duties of the board governing the Exchange, and requires the board to facilitate the purchase of qualified health plans by qualified individuals and qualified small employers. Existing law prohibits a member of the board from being employed by, a consultant to, a member of the board of directors of, affiliated with, or otherwise a representative of, a carrier or other insurer, an agent or broker, a health care provider, or a health care facility or health clinic while serving on the board or on the staff of the Exchange and from receiving compensation for service on the board, except as specified.
This bill would create an exception to that prohibition by authorizing a member of the board or of the staff of the Exchange to perform volunteer services under specified conditions, including that the member or staff does not receive compensation, as described, for rendering services and does not have an ownership interest in the entity, facility, clinic, or provider group.
(2) Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of that act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law, the Information Practices Act of 1977, regulates the collection and disclosure of personal information regarding individuals by state agencies, except as specified. Under existing law, a person who willfully requests or obtains a record containing personal information from an agency under false pretenses or a person who intentionally discloses medical, psychiatric, or psychological information held by an agency is guilty of a misdemeanor.
Existing law states the intent of the Legislature to establish the Health Care Cost Transparency Database to collect information on the cost of health care, and requires the Office of Statewide Health Planning and Development to convene a review committee to advise the office on the establishment and implementation of the database. Existing law requires, subject to appropriation, the office to establish, implement, and administer the database by July 1, 2023. Existing law requires certain health care entities, including a health care service plan, to provide specified information to the office for collection in the database.
This bill would delete those provisions relative to the Health Care Cost Transparency Database and would instead require the office to establish the Health Care Payments Data Program to implement and administer the Health Care Payments Data System, which would include health care data submitted by health care service plans, health insurers, a city or county that offers self-insured or multiemployer-insured plans, and other specified mandatory and voluntary submitters. The bill would require the Department of Managed Health Care and the Department of Insurance to take appropriate action to bring a plan or insurer into compliance if the office notifies the appropriate department of a plan or insurer’s failure to submit required data. Because a willful violation of these provisions by a health care service plan would be a crime, and because a city or county that offers self-insured or multiemployer-insured plans would be required to submit health care data to the office, the bill would impose a state-mandated local program. The bill would exempt multiple employer welfare arrangements, as defined, that are regulated pursuant to specified provisions of the Insurance Code from these requirements. The bill would also make a health insurer that fails to comply with the data submission requirements subject to certain civil penalties, as specified.
This bill would require the office to use the above-described data to produce publicly available information, including data products, summaries, analyses, studies, and other reports, to support goals that include improving public health, reducing disparities, and reducing health care costs. The bill would also require the office to submit a report to the Legislature, on or before March 1, 2024, that includes, among other things, claims data reported by mandatory and voluntary submitters. The bill would protect the confidentiality of personally identifiable data submitted to the system and would exempt it from disclosure, but would authorize controlled access to that nonpublic data by outside data analysts, researchers, and other qualified applicants if the data and requesters meet specified criteria. The bill would require a person accessing nonpublic data to sign a data use agreement subject to the penalties of the Information Practices Act of 1977. Because a willful violation of a data use agreement would be a crime, the bill would impose a state-mandated local program.
This bill would authorize the office to establish pricing mechanisms for data products, custom reports, and the use of nonpublic data, and would require revenues from those activities to be deposited into the Health Care Payments Data Fund, for use by the office upon appropriation by the Legislature. The bill would require the office to establish a Health Care Payments Data Program advisory committee with specified membership to assist and advise the director of the office in formulating program policies regarding data collection, management, use, and access, and development of public information to meet the goals of the program. The bill would also require the office to establish a data release committee with specified membership to make recommendations about applications seeking either program data with direct personal identifiers or the transmission of standardized datasets, except for data requests from other state agencies.
(3) Existing law establishes the State Department of Public Health within the California Health and Human Services Agency.
Existing law authorizes the Director of Public Health to establish and administer a program within the department’s Office of AIDS to subsidize certain costs of medications for the prevention of human immunodeficiency virus (HIV) infection and other related medical services to residents of California who are at least 18 years of age, who are HIV negative, and who meet specified other requirements. Existing law also authorizes the program to subsidize, without regard to eligibility and for the prevention of HIV infection, up to 14 days of pre-exposure prophylaxis (PrEP) and post-exposure prophylaxis (PEP) medications and up to 28 days of PEP medications for a victim of sexual assault.
This bill instead would authorize the program to subsidize up to 30 days of PrEP and PEP medications for the prevention of HIV infection, without regard to whether the person was a victim of sexual assault.
Existing law requires, to the extent that funds are appropriated for these purposes, the State Public Health Officer to establish a program to provide drug treatments to persons infected with HIV. Existing law requires the department to establish uniform standards of financial eligibility for the drugs under the program. Existing law requires the department to disclose to the Franchise Tax Board identifying information regarding an applicant for, or recipient of, services under the program for the purpose of verifying the accuracy of the applicant’s or recipient’s adjusted gross income reported on the application for the program, and requires the Franchise Tax Board to inform the department of the applicant’s federal and state adjusted gross income and other specified income. Existing law also makes this information a confidential public record, as defined. Existing law makes a person who willfully, maliciously, or negligently discloses the content of a confidential public health record to a third party, except pursuant to a written authorization, or as otherwise authorized by law, that results in economic, bodily, or psychological harm to the person whose confidential public health record was disclosed, guilty of a misdemeanor, punishable by imprisonment in a county jail for a period not to exceed one year, or a fine not to exceed $25,000, or both.
This bill would require the department to verify, and the Franchise Tax Board to report to the department, the modified adjusted gross income, rather than the adjusted gross income, of the applicant or recipient. The bill would also require the Franchise Tax Board to inform the department of income received by the taxpayer household and the family size of the taxpayer household. By expanding the scope of the information contained in a confidential public record, the bill would expand the scope of a crime, thereby imposing a state-mandated local program.
Existing law requires the department to develop and review plans and participate in a program for the prevention and control of sexually transmitted diseases. Existing law requires the department, contingent upon appropriation in the annual Budget Act, to allocate grants to local health jurisdictions for sexually transmitted disease, HIV, and hepatitis C virus control and prevention activities. Existing law suspends those programs as of December 31, 2021, unless projected General Fund revenues exceed the projected annual General Fund expenditures in the 2021–22 and 2022–23 fiscal years by a specified amount.
This bill would repeal the contingent suspension of those programs.
(4) Existing law requires the department to implement and administer a residential lead-based paint hazard reduction program. Existing law requires specified persons engaged in lead construction work to have a certificate issued by the department. Existing law authorizes the department to establish fees for accreditation, certification, and licensing in connection with the program for deposit in the Lead-Related Construction Fund. Moneys in the fund are available upon appropriation. Existing law requires the department to prepare a report, as specified, by February 1 of any year in which the department raises or establishes new or additional fees, including the fees described above, to make that report and the list of fees available to the Budget Committees of the Legislature, and to post the report and the list of fees on the department’s internet website. Existing law, the Administrative Procedure Act, sets forth the requirements for the adoption, publication, review, and implementation of regulations by state agencies, and for review of those regulatory actions by the Office of Administrative Law.
This bill would make those adjustments and modifications of fees and the publication of the final fee list exempt from the Administrative Procedure Act, and would instead only require that the revised list of fees be filed with the Secretary of State and printed in the California Code of Regulations.
(5) Existing federal law, the Patient Protection and Affordable Care Act (PPACA), establishes annual limits on health care deductibles and defines bronze, silver, gold, and platinum levels of coverage for the nongrandfathered individual and small group markets. Existing law provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and the regulation of health insurers by the Department of Insurance. Existing law authorizes the actuarial value for a nongrandfathered bronze level high deductible health plan or health insurance policy to range from plus 4% to minus 2%.
This bill would instead authorize the actuarial value for a nongrandfathered bronze level health plan or health insurance policy that either covers and pays for at least one major service, other than preventive services, before the deductible or meets the requirements to be a high deductible health plan to range from plus 5% to minus 2%.
(6) Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.
For purposes of administering the Medi-Cal program, existing law vests the Director of Health Care Services with those powers and duties necessary to conform to requirements for securing federal approval of a state plan. Existing federal law authorizes the Secretary of California Health and Human Services to waive provisions of federal Medicaid law under specified circumstances, including when the secretary finds that the waiver would be cost effective and efficient. Existing state law requires the department to seek a variety of waivers of federal law, such as the Medi-Cal 2020 Demonstration Project, which is scheduled to expire on December 31, 2020. Pursuant to existing law, the President, under the National Emergencies Act, and the Governor, under the California Emergency Services Act, declared a national emergency and a state of emergency, respectively, in response to the novel coronavirus, known as COVID-19.
For the duration of the COVID-19 emergency period, this bill would require the department to implement any federal Medicaid program waiver or flexibility approved by the federal Centers for Medicare and Medicaid Services related to that emergency and to exercise its option under prescribed law to extend medical assistance to uninsured individuals, as specified, for the duration of that emergency period. The bill would authorize the department to extend medical assistance afforded to uninsured individuals to include COVID-19-related treatment services that are otherwise covered for full-scope Medi-Cal beneficiaries, and, if federal financial participation is unavailable, would authorize the department to elect to implement that provision on a state-only funding basis, subject to an appropriation by the Legislature. The bill would require the department to maximize federal financial participation for Medi-Cal expenditures for the COVID-19 public health emergency, to comply with any federal requirements and conditions for receipt of that federal financial participation, and, subject to Department of Finance approval, to seek any federal approvals to implement those provisions or to maintain sufficient access to covered Medi-Cal benefits during this emergency period. Due to the impact of the COVID-19 public health emergency on the Medi-Cal program, this bill would authorize the department to seek federal approvals for temporary extensions of the Medi-Cal 2020 Demonstration Project, and would require the department to consult with affected stakeholder entities before seeking any extension.
Existing law provides for the suspension of Medi-Cal benefits to an inmate of a public institution, and requires county welfare departments to notify the department within 10 days of receiving information that an individual who is receiving Medi-Cal is or will be an inmate of a public institution. Existing law generally requires a county to redetermine a Medi-Cal beneficiary’s eligibility to receive Medi-Cal benefits every 12 months and whenever the county receives information about changes in a beneficiary’s circumstances that may affect their eligibility for Medi-Cal benefits. Existing federal law, the SUPPORT for Patients and Communities Act, prohibits a state from terminating Medi-Cal eligibility for an eligible juvenile if they are an inmate of a public institution, authorizes the suspension of Medicaid benefits to that eligible juvenile, and requires a state to conduct a redetermination of Medicaid eligibility or process an application for medical assistance under the Medicaid program for an eligible juvenile who is an inmate of a public institution.
This bill would conform the suspension of benefits for juveniles, as defined, under state law with those federal provisions. The bill would require the department, in consultation with stakeholders, including the County Welfare Directors Association of California, to develop and implement a redetermination of eligibility, to the extent required by federal law, for juveniles, as defined, whose eligibility is suspended. Because counties are required to make Medi-Cal eligibility determinations, and the bill would expand Medi-Cal determinations of eligibility for eligible juveniles of public institutions, the bill would impose a state-mandated local program.
Existing law requires the Director of Health Care Services to annually review the reimbursement levels for physician and dental services under the Medi-Cal program, and to periodically revise the rates of reimbursement to physicians and dentists to ensure the reasonable access of Medi-Cal beneficiaries to physician and dental services. Existing law requires that the annual review, as it relates to rates for physician services, take into account specified factors, including physician reimbursement levels set forth by Blue Shield of California and other third-party payers, and procedures reflected by the current Relative Value Studies (RVS).
This bill would instead require the director to periodically review those reimbursement levels under the Medi-Cal fee-for-service delivery system, and to periodically revise those rates to the extent they deem necessary to comply with federal Medicaid program requirements on reasonable access to those services for Medi-Cal beneficiaries. The bill would limit the periodic review, as it relates to physician services, to requirements specified in the department’s federally approved access monitoring plan, or any successor methodology for monitoring reasonable access to Medi-Cal services, and to take into account specified factors. The bill would delete the above-specified factors regarding Blue Shield, third-party payers, and RVS.
Existing law establishes the Drug Medi-Cal Treatment Program (Drug Medi-Cal), under which the department is authorized to enter into contracts with each county, or enter into contracts directly with certified providers, for the provision of alcohol and drug use treatment services, including substance use disorder services, narcotic treatment program services, and naltrexone services, to Medi-Cal beneficiaries. Existing federal law requires, from October 1, 2020, to September 30, 2025, inclusive, medication-assisted treatment, as defined, to be a covered health care service under a state Medicaid program.
This bill would, subject to federal approval and the availability of federal financial participation, expand narcotic treatment program services to include medication-assisted treatment under Drug Medi-Cal, and would make conforming changes. The bill would authorize the department to implement provisions on services, reimbursement, and audits related to Drug Medi-Cal by various means, including bulletins, and would require the department, by July 1, 2023, to subsequently adopt regulations.
Existing law requires the department to establish a 3-year pilot program in specified counties to provide medically tailored meals, as defined, to Medi-Cal participants with specified health conditions, such as cancer and renal disease. Existing law requires the department to evaluate, at the conclusion of the program, the impact of the pilot program on specified matters related to participants, including hospital readmission and emergency room utilization rates, and to send, on or before January 1, 2021, or within 12 months after the end of the program, a report on the evaluation to the Legislature. Existing law makes these provisions inoperative on the earlier of January 1, 2021, or 6 months following the end of the program.
This bill would extend the duration of the pilot program to 4 years, delete the January 1, 2021, due date for the report, and make related, conforming, and technical changes. The bill would also make these provisions inoperative on the earlier of the date the department submits its report to the Legislature or 12 months after the end of the program.
Existing law, until July 1, 2021, and only to the extent that federal participation is available, requires the department to establish and administer the Medi-Cal Electronic Health Records Incentive Program to provide federal incentive payments to Medi-Cal providers for the implementation and use of electronic health records systems.
This bill would recast that program as the Medi-Cal Promoting Interoperability Program and would extend its operation until January 1, 2024.
(7) Existing law establishes the State Department of State Hospitals within the California Health and Human Services Agency and provides the department with jurisdiction over specified facilities for the care and treatment of persons with mental health disorders. Existing law requires the Director of State Hospitals to appoint and define the duties of specified officers, including the clinical director and hospital administrator of each state hospital. Existing law requires a hospital administrator to be a college graduate, as specified. Existing law authorizes, until September 2020, the State Department of State Hospitals to house up to 1,530 patients at Patton State Hospital.
This bill would, among other things, eliminate the clinical director position and instead require the Governor, upon the recommendation of the Director of State Hospitals, to appoint one medical director for the department and one medical director for each state hospital. The bill would include any other hospital employee appointed and deemed by the Director of State Hospitals to be an officer, and would require a hospital administrator to be selected based on their overall knowledge of the hospital and the operation of its administrative, business, and life-support functions. This bill would extend the date the State Department of State Hospitals may house up to 1,530 patients at Patton State Hospital to September 2030.
(8) Existing law authorizes the Department of Health Care Services to enter into contracts with drug manufacturers, based on the manufacturer’s best price for purposes of the Medi-Cal program, under which qualified low-income individuals receive health care services. Under existing law, “best price” is defined to mean the negotiated price, or the manufacturer’s lowest available price, to any specified entity within the United States.
This bill instead defines “best price” to mean the negotiated price for any specified entity, including entities both within and outside of the United States.
Existing law authorizes the department, among other things, to enter into contracts with certain drug manufacturers that provide for state rebates for drugs covered under the Medi-Cal program. Under existing law, the department is entitled to various drug rebates, including federal rebates in accordance with certain conditions.
This bill authorizes the department, upon approval by the Department of Finance, to seek the necessary federal approvals to establish and administer a drug rebate program to collect rebate payments from drug manufacturers for drugs furnished to selected populations of California residents who are ineligible for full-scope Medi-Cal.
(9) Existing law limits prescribed drugs under the Medi-Cal program to not more than 6 drugs per month, unless prior authorization is obtained, and except under specified circumstances.
This bill repeals that provision.
(10) Existing law requires Medi-Cal beneficiaries to make set copayments for specified services, including a $1 copayment for a drug prescription or refill, and prohibits the department from reducing the provider reimbursement as a result of the copayment.
This bill would repeal the copayment requirement for a drug prescription or refill.
(11) Existing law governs the licensing of clinics, excluding, among others, a clinic operated by a city or county or conducted, operated, or maintained as an outpatient department of a hospital. Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services, and under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.
Existing federal law requires the United States Secretary of Health and Human Services to enter into an agreement with each manufacturer of covered drugs that are not subject to a rebate under an agreement between the state Medicaid program and the manufacturer under which the amount required to be paid to the manufacturer for covered drugs purchased by a covered entity does not exceed an amount equal to the average manufacturer price for the drug under the federal Medicaid program in the preceding calendar quarter, reduced by the rebate received pursuant to the Medicaid agreement. This program is commonly referred to as the 340B Drug Pricing program or 340B program.
This bill would require the State Department of Health Care Services, subject to an appropriation by the Legislature, to establish, implement, and maintain a supplemental payment pool for nonhospital 340B community clinics, which include licensed clinics and clinics operated by a city, county, city and county, or hospital authority, as specified. The bill would require the department, beginning January 1, 2021, to make available fee-for-service-based supplemental payments from the pool, subject to an appropriation by the Legislature. The bill would require the department, on or before July 15, 2020, to establish a stakeholder process to develop and implement the methodology for distribution of supplemental pool payments to qualifying nonhospital 340B community clinics, which would be finalized no later than October 1, 2020. The bill would require the department to implement these provisions only to the extent that any necessary federal approvals have been obtained, and federal financial participation is available and is not otherwise jeopardized.
(12) The federal Medicaid program prohibits payment to a state for medical assistance furnished to a person who is not lawfully admitted for permanent residence or otherwise permanently residing in the United States under color of law. Existing law extends eligibility for full-scope Medi-Cal benefits to individuals under 25 years of age who are otherwise eligible for those benefits but for their immigration status. Existing law requires the department to claim federal financial participation to the extent that the department determines it is available, and requires the department to use state funds to the extent that federal financial participation is not available, to implement full-scope Medi-Cal for those who are otherwise eligible but for their immigration status.
This bill would provide that Medi-Cal benefits for invidivuals who are 65 years of age or older, and who do not have satisfactory immigration statuses or are unable to establish satisfactory immigration statuses, as specified, will be prioritized in the Budget Act for the upcoming fiscal year if the Department of Finance projects a positive ending balance in the Special Fund for Economic Uncertainties for the upcoming fiscal year and each of the ensuing three fiscal years that exceeds the cost of providing those individuals full scope Medi-Cal benefits.
(13) Under existing law, health care services are provided under the Medi-Cal program pursuant to a schedule of benefits, and those benefits are provided to beneficiaries through various health care delivery systems, including fee-for-service and managed care.
Existing law authorizes the department to enter into various types of contracts for the provision of services to beneficiaries, including contracts with Medi-Cal managed care plans. Existing law requires the department to pay capitations rates to health plans participating in the Medi-Cal managed care program using actuarial methods, and authorizes the department to establish health-plan and county-specific rates, as specified.
Pursuant to existing law, the President, under the National Emergencies Act, and the Governor, under the California Emergency Services Act, declared a national emergency and a state of emergency, respectively, in response to the novel coronavirus, known as COVID-19.
To account for the impacts of the COVID-19 public health emergency on Medi-Cal managed care capitation rates, this bill would require the department to develop and pay capitation rates and capitation rate increments for Medi-Cal managed care plan contracts, including developing and implementing a risk corridor. The bill would require the department to reduce applicable capitation rate increments by up to 1.5% for capitation rates associated with the period of July 1, 2019, to December 31, 2020, inclusive, and to apply this reduction to rating periods starting on or after January 1, 2021, as prescribed. The bill would require the department to evaluate the impact of the COVID-19 public health emergency on capitation rates, and to make any adjustments to ensure capitation rates are actuarially appropriate.
This bill would authorize the department, in consultation with the Department of Finance, to modify the prescribed payment methodologies and related requirements or modify any application of those provisions to Medi-Cal managed care plans, certain capitation rate increments, certain Medi-Cal managed care enrollee categories and subcategories of aid, or certain categories or subcategories of medical assistance provided under those contracts, if the department determines the modification is necessary to meet federal requirements, to obtain or maintain federal approval, or to maximize federal financial participation.
(14) Existing law, the California Healthcare, Research, and Prevention Tobacco Tax Act of 2016, or Proposition 56, which was approved by voters at the November 8, 2016, statewide general election, increases taxes imposed on distributors of cigarettes and tobacco products and allocates a specified percentage of those revenues to the department to increase funding for the Medi-Cal program, in a manner that, among other things, ensures timely access, limits specific geographic shortages of services, or ensures quality care. Existing law establishes the Healthcare Treatment Fund for this purpose.
Existing law requires the Department of Health Care Services to develop, using moneys appropriated in the Budget Act for this purpose from the Healthcare Treatment Fund, value-based payment (VBP) programs that require designated Medi-Cal managed care plans to make incentive payments to qualified network providers in behavioral health integration, prenatal and postpartum care, and chronic disease management for specified purposes and to implement the VBP programs for a period no shorter than 3 fiscal years, as specified. Existing law requires these payments to be suspended on December 31, 2021.

This bill would suspend the authority for the State Department of Health Care Services to make value-based payments pursuant on or after July 1, 2021, unless one of two specified conditions applies.

(15) This bill would reappropriate $1,430,000 to support the Medically Tailored Meals Pilot Program, as specified.
(16) The bill would provide that its provisions are severable.
(17) 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 with regard to certain mandates no reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
(18) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.
(19) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.
(1)Existing law establishes the Community-Based Transitional Housing Program, administered by the Department of Finance (DOF), for the purpose of providing grants to cities, counties, and cities and counties to increase the supply of transitional housing available to persons previously incarcerated for felony and misdemeanor convictions and funded with moneys appropriated for that purpose in the annual Budget Act or other measure. Existing law requires DOF’s Office of State Audits and Evaluations to conduct a review of the program, commencing July 1, 2018, to determine its effectiveness in providing services to offenders released from state prison or county jail, and authorizes DOF to use up to $500,000 of the amount appropriated in any budget act or other measure for the program for this review, as specified. Existing law requires DOF to provide a copy of the audit to the Joint Legislative Budget Committee no later than May 1, 2019.
This bill would instead require the Office of State Audits and Evaluations to conduct an audit of the program, as specified, and would remove the requirement that the Office of State Audits and Evaluations commence the audit on July 1, 2018. The bill would extend the date by which DOF is required to provide a copy of the audit to the Joint Legislative Budget Committee to no later than May 1, 2020.
(2)The Planning and Zoning Law requires a city or county to adopt a general plan for land use development within its boundaries that includes, among other things, a housing element. That law requires the Department of Housing and Community Development (HCD) to determine whether the housing element is in substantial compliance with specified provisions of that law. That law also requires HCD to notify a city, county, or city and county, and authorizes HCD to notify the office of the Attorney General, that the city, county, or city and county is in violation of state law if the local government has taken action in violation of specified provisions of law.
This bill, in any action or special proceeding brought in connection with a violation of state law identified as described above, would require the Attorney General to request that the court issue an order or judgment directing a violating jurisdiction to bring its housing element into substantial compliance with those specified provisions and would require the court to retain jurisdiction to ensure that its order or judgment is carried out. The bill would require a court to conduct a status conference if a jurisdiction has not complied with the order or judgment within a specified time period. The bill, following the status conference and upon a determination that the jurisdiction failed to comply with the order or judgment, would require the court to, among other things, impose fines, as specified. The bill would require these fines to be deposited in the Building Homes and Jobs Trust Fund, which is partially continuously appropriated. By depositing money into a partially continuously appropriated fund, this bill would make an appropriation. If the jurisdiction has not complied with the order or judgment within specified time periods after the imposition of fines, the bill would require the court to conduct additional status conferences and multiply the amount of fine and order the appointment of an agent of the court to bring the jurisdiction’s housing element into substantial compliance, as provided. The bill, commencing July 1, 2019, would require HCD, prior to bringing any suit for a violation by a jurisdiction of a specified provision of law, to offer the jurisdiction the opportunity for 2 meetings in person or via telephone to discuss the violation and to provide the jurisdiction written findings regarding the violation, as specified.
This bill, for award cycles commenced after July 1, 2021, would require that jurisdictions, defined as a city, county, or city and county in existing law, that have adopted housing elements determined by HCD to be in substantial compliance with specified provisions of the Planning and Zoning Law, as described above, and that have been designated by HCD as prohousing, as specified, be awarded additional points in the scoring of program applications for housing and infrastructure programs pursuant to guidelines adopted by HCD, as provided.
This bill would require DOF to maintain a list of programs for which a jurisdiction is ineligible if it fails to adopt a housing element that is found to be in substantial compliance with specified provisions of the Planning and Zoning Law. The bill would also require HCD to post on its internet website a list of jurisdictions that have failed to adopt a housing element that has been found by HCD to be in substantial compliance with specified provisions of the Planning and Zoning Law. The bill would require HCD to provide that list to the Office of Planning and Research and any other applicable agency or department, as specified. If a jurisdiction is ineligible for those housing and development programs, the bill would require HCD to offer the jurisdiction the opportunity for 2 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 with specified provisions of the Planning and Zoning Law and to provide the jurisdiction written findings regarding that failure.
The bill would include findings that changes proposed by these provisions address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.
(3)The Planning and Zoning Law requires that supportive housing be a use by right, as defined, in zones where multifamily and mixed uses are permitted, including nonresidential zones permitting multifamily uses, if the proposed housing development meets specified requirements. The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the project will not have that effect. CEQA does not apply to the ministerial approval of projects.
This bill would require that a Low Barrier Navigation Center development be a use by right, as defined, in areas zoned for mixed uses and nonresidential zones permitting multifamily uses if it meets specified requirements. The bill would define “Low Barrier Navigation Center” as 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. The bill would define the term “use by right” in this context to mean that the local government’s review of the Low Barrier Navigation Center development may not impose certain requirements, such as a conditional use permit or other discretionary review or approval. The bill would provide that CEQA does not apply to an action taken by a public agency to lease, convey, or encumber land owned by a public entity or to facilitate the lease, conveyance, or encumbrance of land owned by a public agency, or to provide financial assistance to, or otherwise approve, a Low Barrier Navigation Center constructed or allowed by this bill. In addition, the bill, by authorizing Low Barrier Navigation Center developments to be a use by right under certain circumstances, would expand the exemption for the ministerial approval of projects under CEQA.
The bill would prescribe requirements for notifying a developer that its application for a Low Barrier Navigation Center development is complete and for the local jurisdiction to complete its review of the application. The bill would declare that Low Barrier Navigation Center developments are essential tools for alleviating the homelessness crisis in this state and are a matter of statewide concern and thus applicable to charter cities.
~~The bill would repeal these provisions as of January 1, 2027.~~
~~By increasing the duties of local planning officials, this bill would impose a state-mandated local program.~~
(4)The Planning and Zoning Law, until January 1, 2026, authorizes a development proponent to submit an application for a housing development that is subject to a streamlined, ministerial approval process, as provided, and not subject to a conditional use permit, if the development satisfies specified objective planning standards. Existing law provides, among other objective planning standards, that at least 23 of the square footage of the development be designated for residential use.
Existing law, known as the Density Bonus Law, requires a city or county to provide a developer that proposes a housing development within the jurisdictional boundaries of that city or county with a density bonus and other incentives or concessions for the production of lower income housing units or for the donation of land within the jurisdiction for housing, if the developer agrees to construct a specified percentage of units for very low income, low-income, or moderate-income households or qualifying residents and meets other requirements.
This bill would require that the calculation to determine whether 23 of the square footage of the development is designated for residential use include additional density, floor area, and units, and any other concession, incentive, or waiver, granted pursuant to the Density Bonus Law.
Existing law prohibits a development subject to the streamlined, ministerial approval process from being located on a hazardous waste site, as defined, unless the Department of Toxic Substances Control has cleared the site for residential use.
This bill would instead prohibit a development subject to the streamlined, ministerial approval process from being located on a hazardous waste site, as defined, unless the State Department of Public Health, State Water Resources Control Board, or the Department of Toxic Substances Control has cleared the site for residential use.
~~(5)Existing law establishes the California Tax Credit Allocation Committee (CTCAC) within state government, which is composed of the Governor, the Controller, and the Treasurer.~~
~~This bill would revise the composition of CTCAC to include the Director of Housing and Community Development and the Executive Director of the California Housing Finance Agency.~~
(6)Existing law establishes various programs, including, among others, the Emergency Housing and Assistance Program, to provide assistance to homeless persons. Existing law sets forth the general responsibilities and roles of the Business, Consumer Services, and Housing Agency, HCD and the California Housing Finance Agency (CalHFA) in carrying out state housing policies and programs.
This bill would establish the Homeless Housing, Assistance, and Prevention Program administered by the Business, Consumer Services, and Housing Agency for the purpose of providing jurisdictions, as defined, with one-time grant funds to support regional coordination and expand or develop local capacity to address homelessness challenges, as specified. Upon appropriation, the bill would require the agency to distribute $650,000,000 among cities, counties, and continuums of care, as provided. The bill, no later than February 15, 2020, would require an applicant to submit to the agency its program allocation application. The bill would require the agency to review each plan and make an allocation determination no later than April 1, 2020. The bill would require a recipient of program funds to submit annual progress reports to the agency and a final report, no later than January 1, 2026, regarding the expenditure of funds under the program.
(7)The Planning and Zoning Law requires HCD, in consultation with each council of governments, to determine the existing and projected need for housing in each region and further requires the appropriate council of governments, or HCD for cities and counties without a council of governments, to adopt a final regional housing need plan that allocates a share of the regional housing need to each city, county, or city and county, as provided.
This bill would establish the Local Government Planning Support Grants Program administered by HCD for the purpose of providing regions and jurisdictions with one-time funding. The bill, upon appropriation, would require HCD to allocate $250,000,000 to councils of governments and jurisdictions, as those terms are defined, as well as certain other regional entities to be used for technical assistance, the preparation and adoption of planning documents, and process improvements to accelerate housing production and to facilitate compliance with the 6th cycle of the regional housing need assessment, as provided. The bill would specify eligible uses of these funds. The bill would require these entities to apply for an allocation of funds within specified time periods. The bill would also require these entities to either submit an annual report to HCD, and make that report publicly available on its internet website, containing specified information regarding the uses of funds allocated under the program or, if the recipient is a city or county, include that information in a specified annual report required under existing law.
This bill, by December 31, 2022, would also require HCD, in collaboration with the Office of Planning and Research and after engaging in stakeholder participation, to develop a recommended improved regional housing need allocation process and methodology that promotes and streamlines housing development and substantially addresses California’s housing shortage, as provided. The bill would require HCD to submit a report on its findings and recommendations to the Legislature upon completion.
(8)Existing law requires HCD to establish and administer the Joe Serna, Jr. Farmworker Housing Grant Program, under which, subject to the availability of funds in the Joe Serna, Jr. Farmworker Housing Grant Fund, a continuously appropriated fund, grants or loans, or both, are made available for the construction or rehabilitation of housing for agricultural employees, as defined, and their families or for the acquisition of manufactured housing to remedy the impacts of the displacement of farmworker families. Existing law requires grants and loans made pursuant to this program to be matched by grantees with at least equal amounts of federal moneys, other cash investments, or in-kind contributions, except as specified. Existing law authorizes HCD to set aside up to 4% of funds available in the Joe Serna, Jr. Farmworker Housing Grant Fund on July 1 of each fiscal year for the purposes of curing or averting a default on the terms of any loan or other obligation by a recipient of financial assistance under the program or to repair or maintain any dwelling unit assisted under the program, under specified conditions.
This bill would require HCD to require, for multifamily housing loans made pursuant to the program, annual loan payments in the minimum amount necessary to cover the costs of project monitoring, as specified. The bill would remove the matching funds requirement. The bill would decrease the amount in the Joe Serna, Jr. Farmworker Housing Grant Fund that HCD is authorized to set aside to 1.5% of funds available.
(9)Existing law establishes the CalHome Program, administered by HCD, to enable low- and very low income households to become or remain homeowners. Existing law requires HCD, under the program, to use appropriated funds to provide grant or loan funds to local public agencies or nonprofit corporations for specified purposes relating to the promotion of home ownership. Existing law requires local public agencies or nonprofit corporations to meet certain eligibility requirements, including underwriting requirements. Existing laws authorizes HCD to permit an applicant to apply its own underwriting guidelines, if HCD approves those guidelines, as well as any alterations to those guidelines. Existing law, the Veterans and Affordable Housing Bond Act of 2018, deposits $300,000,000 to the Self-Help Housing Fund, a continuously appropriated fund, for purposes of the CalHome Program, as specified.
This bill would authorize HCD to make grants to local agencies or nonprofit associations for the construction, repair, reconstruction, or rehabilitation of accessory dwelling units and junior accessory dwelling units. The bill would also authorize HCD to use appropriated funds to make grants to local agencies or nonprofit corporations to assist households that meet certain income requirements and are victims of a disaster, provided that the disaster was proclaimed by the Governor, as specified, received a special appropriation of federal emergency supplemental assistance, or declared by the President. The bill would authorize HCD to adopt guidelines to this effect. The bill would also require 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.
~~By expanding the uses of a continuously appropriated fund, this bill would make an appropriation.~~
(10)Existing law establishes the Local Housing Trust Fund Matching Grant Program for the purpose of supporting local housing trust funds dedicated to the creation or preservation of affordable housing. Under the grant program, HCD is authorized to make matching grants available, through the issuance of a Notice of Funding Availability (NOFA), to cities, counties, cities and counties, and existing charitable nonprofit organizations that have created, funded, and operated housing trust funds.
This bill would authorize HCD to make matching grants available under the program, as described above, to Native American tribes. The bill would authorize HCD to adopt guidelines to implement the program. The bill would also authorize HCD to make grants to trust funds for the construction, repair, reconstruction, or rehabilitation of accessory dwelling units and junior accessory dwelling units.
Under existing law, the minimum allocation to a program applicant is $1,000,000 for existing housing trust funds, or $500,000 for newly established housing trust funds. The maximum allocation for any applicant is $2,000,000, unless the applicant has previously received a grant through the program, in which case the maximum allocation is $1,000,000. Under existing law, all funds provided under the grant program are to be matched on a dollar-for-dollar basis with moneys that are not required by any state or federal law to be spent on housing. Existing law requires that HCD receive adequate documentation of the deposit in the local housing trust fund of the local match and the identity of the source of matching funds before considering an application for an existing housing trust.
This bill would authorize 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. The bill would provide 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. In the case of an application for an existing housing trust, the bill would also authorize the applicant to provide evidence of a legally binding commitment to deposit matching funds.
Existing law requires HCD to set aside funding for new trusts, as defined in the NOFA issued for the program. Existing law also requires that funds be used for the predevelopment costs, acquisition, construction, or rehabilitation of specified types of housing, including emergency shelters, safe havens, and transitional housing, as defined by specified law.
This bill would instead require that HCD set aside funding for new trusts, as defined in the guidelines that are authorized by this bill to be adopted to implement the program. The bill would also instead require that funds be used for the predevelopment costs, acquisition, construction, or rehabilitation of emergency shelters, transitional housing, and permanent supportive housing, as defined in those guidelines.
~~Existing law requires that no more than 5% of the funds appropriated to HCD for purposes of the program be used for HCD’s administrative costs.~~
~~This bill would authorize HCD to allow grantees under the program to use up to 5% of the grant award for administrative costs.~~
Existing law requires that a housing trust fund encumber funds provided under the program no later than 36 months after receipt, but provides for a 12-month extension in certain circumstances. Existing law requires that any funds not encumbered within this period revert to HCD for use in the program or its successor.
~~This bill would extend the period in which funds are required to be encumbered from 36 months to 60 months.~~
~~This bill would make various technical and conforming changes to the program.~~
~~Existing law establishes the Housing Rehabilitation Loan Fund, which is continuously appropriated to HCD for specified purposes relating to housing programs.~~
~~By expanding the uses for moneys in the Housing Rehabilitation Loan Fund, a continuously-appropriated fund, the bill would make an appropriation.~~
(11)The Planning and Zoning Law requires that the housing element of a city’s or county’s general plan, as described above, include, among other things, an assessment of housing needs and an inventory of land suitable for residential development. Existing law sets forth various classifications and definitions for purposes of determining a city’s or county’s inventory.
~~Existing law establishes the Infill Incentive Grant Program of 2007, administered by HCD, a competitive grant program to facilitate the development of qualifying infill residential projects.~~
This bill would establish the Infill Infrastructure Grant Program of 2019, which would require HCD, upon appropriation of funds by the Legislature, to establish and administer a grant program to allocate those funds to capital improvement projects that are an integral part of, or necessary to facilitate the development of, a qualifying infill project or qualifying infill area, as those terms are defined, pursuant to specified requirements. The bill, upon appropriation by the Legislature, would authorize HCD to expend $500,000,000 for the program, as specified.
(12)Existing law establishes a low-income housing tax credit program pursuant to which CTCAC provides procedures and requirements for the allocation, in modified conformity with federal law, of state insurance, personal income, and corporation tax credit amounts to qualified low-income housing projects that have been allocated, or qualify for, a federal low-income housing tax credit, and farmworker housing. Existing law limits the total annual amount of the state low-income housing credit for which a federal low-income housing credit is required to the sum of $70,000,000, as increased by any percentage increase in the Consumer Price Index for the preceding calendar year, any unused credit for the preceding calendar years, and the amount of housing credit ceiling returned in the calendar year. For purposes of determining the credit amount, existing law defines the term “applicable percentage” depending on, among other things, whether the qualified low-income building is a new building that is not federally subsidized, a new building that is federally subsidized, or is an existing building that is “at risk of conversion.”
This bill would also, under the law governing the taxation of insurers, the Personal Income Tax Law, and the Corporation Tax Law, for calendar years beginning in 2020, provide for an additional $500,000,000 that may be allocated to specified low-income housing projects and would, for calendar years beginning in 2021, provide that this amount is only available for allocation pursuant to an authorization in the annual Budget Act or related legislation, and specified regulatory action by CTCAC. The bill, under those laws, would modify the definition of “applicable percentage” relating to qualified low-income buildings to depend on whether the building is a new building that is federally subsidized that receives an allocation from the additional $500,000,000 or whether the building is, among other things, at least 15 years old, may serve households of very low income or extremely low income, and will complete substantial rehabilitation, as specified.
Existing law, beginning on or after January 1, 2009, and before January 1, 2020, requires, in the case of a project that receives a preliminary reservation of a state low-income housing tax credit, that the credit be allocated to the partners of a partnership owning the project in accordance with the partnership agreement, as provided. Existing law, beginning on or after January 1, 2016, and before January 1, 2020, authorizes a taxpayer that is allowed a low-income housing tax credit to elect to sell all or a portion of that credit to one or more unrelated parties for each taxable year in which the credit is allowed, as described.
This bill would delete the January 1, 2020, date with respect to both of these provisions, thereby requiring the allocation of credits among partners in accordance with the partnership agreement and authorizing the sale of a credit, as described above, indefinitely.
With respect to the sale of a low-income housing tax credit under these provisions, existing law authorizes the taxpayer to elect to sell all or a portion of the credit in its application to CTCAC. Existing law generally requires that this election be irrevocable, but allows the taxpayer, with the approval of the executive director of CTCAC, to rescind the election to sell if the consideration falls below 80% of the amount of the credit. Existing law also requires that an unrelated party that purchases any or all of a credit under these provisions be a taxpayer that is allowed a credit for the taxable year of the purchase, or was allowed a credit for a prior taxable year, and a state or federal low-income housing tax credit and, except as provided, prohibits the unrelated party from reselling the credit to another taxpayer or other party.
This bill would instead authorize a taxpayer to make a one-time revocation of the election to sell all or any portion of a low-income housing tax credit at any time before CTCAC allocates a final credit amount for a project, at which point the election would become irrevocable. The bill would specifically prohibit a taxpayer from electing to sell all or any portion of a low-income housing tax credit if the taxpayer did not make that election in its application submitted to CTCAC. The bill would also delete the requirement that the unrelated party be a taxpayer that is allowed, or have previously been allowed, a state or federal low-income housing tax credit and the prohibition on the resale of a credit by the unrelated party.
(13)The Personal Income Tax Law and the Corporation Tax Law, in modified conformity with federal law, generally disallow passive activity loss and passive activity credits for any taxable year in computing taxable income, but, in the case of a natural person, allow an offset in the case of the low-income housing tax credit of up to $75,000 for any taxable year for all rental real estate activities in which the individual actively participated in the taxable year, as provided.
This bill, for each taxable year beginning on or after January 1, 2020, would provide that the dollar limitation for the offset for rental real estate activities does not apply to the low-income housing tax credit program.
(14)Existing law requires, by July 1, 2019, agencies and departments administering state programs in existence prior to July 1, 2017, to collaborate with the Homeless Coordinating and Financing Council to revise or adopt guidelines and regulations that incorporate the core components of Housing First, an evidence-based model that uses housing as a tool, rather than a reward, for recovery.
This bill would delay the duty of an agency or department that administers programs that fund recovery housing, as defined, to incorporate the core components of Housing First to July 1, 2020. The bill would additionally require an agency or department that administers programs that fund recovery housing to consult with the Homeless Coordinating and Financing Council, the Business, Consumer Services, and Housing Agency, and stakeholders between July 1, 2019, and July 1, 2020, to identify ways to improve the provision of housing to individuals who receive housing assistance from the agency or department and report to the Senate Committee on Budget and Fiscal Review and the Assembly Committee on Budget by March 1, 2020, as specified.
(15)Existing law establishes the Self-Help Housing Fund and continuously appropriates moneys for specified purposes related to the California Self-Help Housing Program. Existing law also establishes CalHFA within HCD with the primary purpose of meeting the housing needs of persons and families of low or moderate income. Existing law authorizes CalHFA to make, or undertake commitments to make, loans to finance the acquisition, construction, rehabilitation, refinancing, or development of housing intended to benefit, among others, persons identified as having special needs relating to intellectual and developmental disabilities.
This bill would continuously appropriate, without regard to fiscal years, the sum of $500,000,000 to HCD and require that these moneys be deposited in the Self-Help Housing Fund based on a specified schedule. Notwithstanding specified law, the bill would require HCD to transfer these moneys to CalHFA to be used to finance low and moderate income housing, as provided.
(16)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.~~
~~(17)This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.~~

Vote: MAJORITY Appropriation: YES Fiscal Committee: YES Local Program: YES

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

SECTION 1.
The Legislature hereby finds and declares that the amendments made by this act to Article 5.8 of Chapter 7 of Part 3 of Division 9 of the Welfare and Institutions Code are all of the following:
(a) Made in accordance with the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 (commencing with Section 30130.50) of Chapter 2 of Part 13 of Division 2 of the Revenue and Taxation Code.
(b) Based on criteria developed and periodically updated as part of the annual state budget process, in accordance with subdivision (a) of Section 30130.55 of the Revenue and Taxation Code.
(c) Consistent with the purposes and conditions of expenditures described in subdivision (a) of Section 30130.55 of the Revenue and Taxation Code.

SEC. 2.

Section 100500 of the Government Code is amended to read:

100500.

(a) There is in state government the California Health Benefit Exchange, an independent public entity not affiliated with an agency or department, which shall also be known as Covered California. Covered California shall be governed by an executive board consisting of five members who are residents of California. Of the members of the board, two shall be appointed by the Governor, one shall be appointed by the Senate Committee on Rules, and one shall be appointed by the Speaker of the Assembly. The Secretary of California Health and Human Services or ~~his or her~~ the secretary’s designee shall serve as a voting, ex officio member of the board.

(b) Members of the board, other than an ex officio member, shall be appointed for a term of four years, except that the initial appointment by the Senate Committee on Rules shall be for a term of five years, and the initial appointment by the Speaker of the Assembly shall be for a term of two years. Appointments by the Governor ~~made after January 2, 2011, shall be~~ shall be subject to confirmation by the Senate. A member of the board may continue to serve until the appointment and qualification of ~~his or her~~ the member’s successor. ~~Vacancies~~ A vacancy shall be filled by appointment for the unexpired term. The board shall elect a chairperson on an annual basis.

(c) (1) ~~Each~~ A person appointed to the board shall have demonstrated and acknowledged expertise in at least two of the following areas:

(A) Individual health care coverage.

(B) Small employer health care coverage.

(D) Health care finance.

(E) Administering a public or private health care delivery system.

(F) Purchasing health plan coverage.

(G) Marketing of health insurance products.

(H) Information technology system management.

(I) Management information systems.

(J) Enrollment counseling assistance, with priority to cultural and linguistic competency.

(2) Appointing authorities shall consider the expertise of the other members of the board and attempt to make appointments so that the board’s composition reflects a diversity of expertise.

(d) ~~Each~~ A member of the board shall have the responsibility and duty to meet the requirements of this title, the federal act, and all applicable state and federal laws and regulations, to serve the public interest of the individuals and small businesses seeking health care coverage through the Exchange, and to ensure the operational well-being and fiscal solvency of the Exchange.

(e) In making appointments to the board, the appointing authorities shall take into consideration the cultural, ethnic, and geographical diversity of the state so that the board’s composition reflects the communities of California.

(f) (1) A member of the board or of the staff of the Exchange shall not be employed by, a consultant to, a member of the board of directors of, affiliated with, or otherwise a representative of, a carrier or other insurer, an agent or broker, a health care ~~provider,~~ professional, or a health care facility or health clinic while serving on the board or on the staff of the Exchange. A member of the board or of the staff of the Exchange shall not be a member, a board member, or an employee of a trade association of carriers, health facilities, health clinics, or health care ~~providers~~ professionals while serving on the board or on the staff of the Exchange. A member of the board or of the staff of the Exchange shall not be a health care ~~provider~~ professional unless ~~he or she receives no~~ the member or staff does not receive compensation for rendering services as a health care ~~provider~~ professional and does not have an ownership interest in a professional health care practice.

(2) A board member shall not receive compensation for ~~his or her~~ service on the board, but may receive a per diem and reimbursement for travel and other necessary expenses, as provided in Section 103 of the Business and Professions Code, while engaged in the performance of official duties of the board.

(3) For purposes of this subdivision, “health care ~~provider”~~ professional” means a person licensed or certified pursuant to Division 2 (commencing with Section 500) of the Business and Professions Code, or licensed pursuant to the Osteopathic Act or the Chiropractic Act.

(4) (A) It is the intent of the Legislature that clinical volunteer services be performed in settings that predominantly serve populations that are high need, underserved, or otherwise vulnerable, including the homeless and those who receive health care coverage through the Medi-Cal program. Notwithstanding paragraph (1), a member of the board or of the staff of the Exchange may perform volunteer services if all of the following conditions are met:
(i) The member of the board or staff is a health care professional who was actively participating in that profession prior to appointment to the Exchange.
(ii) The member of the board or staff does not receive compensation for performing volunteer services and does not have an ownership interest or other financial interest in the entity, facility, clinic, or provider group.
(iii) The volunteer services are performed at the University of California or a nonprofit educational institution; a facility, clinic, or provider group operated by, or affiliated with, an academic medical center of either the University of California or a nonprofit educational institution; or a facility, clinic, or provider group operated by a state agency or county health system that does not directly contract with the Exchange.
(B) For purposes of this paragraph, compensation and financial interest for a health care professional who performs volunteer services does not include either of the following:
(i) A contribution to a professional liability insurance program made by the entity, facility, clinic, or provider group for the member or staff.
(ii) The provision of physical space, equipment, support staff, or other supports made by the entity, facility, clinic, or provider group for the member or staff necessary for the performance of volunteer services described in subparagraph (A).

(g) A member of the board shall not make, participate in making, or in any way attempt to use ~~his or her~~ the member’s official position to influence the making of a decision that ~~he or she~~ the member knows or has reason to know will have a reasonably foreseeable material financial effect, distinguishable from its effect on the public generally, on ~~him or her~~ the board member or a member of ~~his or her~~ the board member’s immediate family, or on either of the following:

(1) ~~Any~~ A source of income, other than gifts and other than loans by a commercial lending institution in the regular course of business on terms available to the public without regard to official status aggregating two hundred fifty dollars ($250) or more in value provided to, received by, or promised to the member within 12 months prior to the time when the decision is made.

(2) ~~Any~~ A business entity in which the member is a director, officer, partner, trustee, employee, or holds any position of management.

(h) ~~There shall not be liability in a private capacity on the part of the~~ The board or a member of the board, or an officer or employee of the board, is not liable in a private capacity for or on account of an act performed or obligation entered into in an official capacity, when done in good faith, without intent to defraud, and in connection with the administration, management, or conduct of this title or affairs related to this title.

(i) The board shall hire an executive director to organize, administer, and manage the operations of the Exchange. The executive director shall be exempt from civil service and shall serve at the pleasure of the board.

(j) The board ~~shall be~~ is subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2), except that the board may hold closed sessions when considering matters related to litigation, personnel, contracting, and rates.

(k) (1) The board shall apply for planning and establishment grants made available to the Exchange pursuant to Section 1311 of the federal act. If an executive director has not been hired under subdivision (i) when the United States Secretary of Health and Human Services makes the planning and establishment grants available, the California Health and Human Services Agency shall, upon request of the board, submit the initial application for planning and establishment grants to the United States Secretary of Health and Human Services.

(2) If a majority of the board has not been appointed when the United States Secretary of Health and Human Services makes the planning and establishment grants available, the California Health and Human Services Agency shall submit the initial application for planning and establishment grants to the United States Secretary of Health and Human Services. Any subsequent applications shall be made as described in paragraph (1) once a majority of the members have been appointed to the board.

(3) The board ~~shall be~~ is responsible for using the funds awarded by the United States Secretary of Health and Human Services for the planning and establishment of the Exchange, consistent with subdivision (b) of Section 1311 of the federal act.

(l) ~~Any~~ A reference to the California Health Benefit Exchange or the Exchange is deemed to refer to Covered California.

SEC. 3.

Section 1367.0085 of the Health and Safety Code is amended to read:

1367.0085.

Notwithstanding paragraph (1) of subdivision (b) of Section 1367.008 and paragraph (1) of subdivision (b) of Section 1367.009, the actuarial value for a nongrandfathered bronze level health plan that either covers and pays for at least one major service, other than preventive services, before the deductible or meets the requirements to be a high deductible health plan, as defined in Section 223(c)(2) of Title 26 of the United States Code, may range from plus 4 5 percent to minus 2 percent.

SEC. 4.

Section 1386 of the Health and Safety Code is amended to read:

1386.

(a) The director may, after appropriate notice and opportunity for a hearing, by order suspend or revoke any license issued under this chapter to a health care service plan or assess administrative penalties if the director determines that the licensee has committed any of the acts or omissions constituting grounds for disciplinary action.

(b) The following acts or omissions constitute grounds for disciplinary action by the director:

(1) The plan is operating at variance with the basic organizational documents as filed pursuant to Section 1351 or 1352, or with its published plan, or in any manner contrary to that described in, and reasonably inferred from, the plan as contained in its application for licensure and annual report, or any modification thereof, unless amendments allowing the variation have been submitted to, and approved by, the director.

(2) The plan has issued, or permits others to use, evidence of coverage or uses a schedule of charges for health care services that do not comply with those published in the latest evidence of coverage found unobjectionable by the director.

(3) The plan does not provide basic health care services to its enrollees and subscribers as set forth in the evidence of coverage. This subdivision shall not apply to specialized health care service plan contracts.

(4) The plan is no longer able to meet the standards set forth in Article 5 (commencing with Section 1367).

(5) The continued operation of the plan will constitute a substantial risk to its subscribers and enrollees.

(6) The plan has violated or attempted to violate, or conspired to violate, directly or indirectly, or assisted in or abetted a violation or conspiracy to violate any provision of this chapter, any rule or regulation adopted by the director pursuant to this chapter, or any order issued by the director pursuant to this chapter.

(7) The plan has engaged in any conduct that constitutes fraud or dishonest dealing or unfair competition, as defined by Section 17200 of the Business and Professions Code.

(8) The plan has permitted, or aided or abetted any violation by an employee or contractor who is a holder of any certificate, license, permit, registration, or exemption issued pursuant to the Business and Professions Code or this code that would constitute grounds for discipline against the certificate, license, permit, registration, or exemption.

(9) The plan has aided or abetted or permitted the commission of any illegal act.

(10) The engagement of a person as an officer, director, employee, associate, or provider of the plan contrary to the provisions of an order issued by the director pursuant to subdivision (c) of this section or subdivision (d) of Section 1388.

(11) The engagement of a person as a solicitor or supervisor of solicitation contrary to the provisions of an order issued by the director pursuant to Section 1388.

(12) The plan, its management company, or any other affiliate of the plan, or any controlling person, officer, director, or other person occupying a principal management or supervisory position in the plan, management company, or affiliate, has been convicted of or pleaded nolo contendere to a crime, or committed any act involving dishonesty, fraud, or deceit, which crime or act is substantially related to the qualifications, functions, or duties of a person engaged in business in accordance with this chapter. The director may revoke or deny a license hereunder irrespective of a subsequent order under the provisions of Section 1203.4 of the Penal Code.

(13) The plan violates Section 510, 2056, or 2056.1 of the Business and Professions Code or Section 1375.7.

(14) The plan has been subject to a final disciplinary action taken by this state, another state, an agency of the federal government, or another country for any act or omission that would constitute a violation of this chapter.

(15) The plan violates the Confidentiality of Medical Information Act (Part 2.6 (commencing with Section 56) of Division 1 of the Civil Code).

(16) The plan violates Section 806 of the Military and Veterans Code.

(17) The plan violates Section 1262.8.

(18) The plan violates Chapter 8.5 (commencing with Section 127671) of Part 2 of Division 107, including the data submission requirements of that chapter.

(c) (1) The director may prohibit any person from serving as an officer, director, employee, associate, or provider of any plan or solicitor firm, or of any management company of any plan, or as a solicitor, if either of the following applies:

(A) The prohibition is in the public interest and the person has committed, caused, participated in, or had knowledge of a violation of this chapter by a plan, management company, or solicitor firm.

(B) The person was an officer, director, employee, associate, or provider of a plan or of a management company or solicitor firm of any plan whose license has been suspended or revoked pursuant to this section and the person had knowledge of, or participated in, any of the prohibited acts for which the license was suspended or revoked.

(2) A proceeding for the issuance of an order under this subdivision may be included with a proceeding against a plan under this section or may constitute a separate proceeding, subject in either case to subdivision (d).

(d) A proceeding under this section shall be subject to appropriate notice to, and the opportunity for a hearing with regard to, the person affected in accordance with subdivision (a) of Section 1397.

SEC. 5.

Section 105250.1 of the Health and Safety Code is amended to read:

105250.1.

(a) Notwithstanding Section 105250, and beginning on July 1, 2018, the Lead-Related Construction Program fee for an application submitted for lead certification shall be eighty-seven dollars ($87), but shall not exceed the department’s reasonable administrative costs in connection with the application. The application fees provided in this section, and any application fee increase pursuant to subdivision (b) or Section 105250, shall be sufficient to ensure that processing times for completed applications do not exceed an average of 60 days.

(b) Notwithstanding subdivision (a) and Section 105250, in any year the department raises or establishes new or additional fees, the department shall, by February 1 of the year the increase or establishment takes effect, prepare a report that describes the need for a fee increase or establishment of a fee, and shall make the report and the list of fees available to the budget committees of the Legislature, and shall post the report and list of fees on the department’s ~~Internet Web site.~~ internet website. The proposed increased fee shall take effect on July 1 of the year for which it is proposed. The adjustment of fees and the publication of the final fee list shall not be subject to the rulemaking requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. Modification of the fees shall be exempt from the administrative regulation and rulemaking requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code and shall be implemented without being adopted as a regulation, except that the revised list of fees shall be filed with the Secretary of State and printed in the California Code of Regulations.

SEC. 6.

Section 120512 of the Health and Safety Code is repealed.

120512.
Section 120511 shall be suspended on December 31, 2021. If the estimates of General Fund revenues and expenditures determined pursuant to Section 12.5 of Article IV of the California Constitution that accompany the May Revision required to be released by May 14, 2021, pursuant to Section 13308 of the Government Code, contain projected annual General Fund revenues that exceed projected annual General Fund revenues expenditures in the 2021–22 fiscal year and the 2022–23 fiscal year by the sum total of General Fund revenues appropriated for all programs suspended pursuant to the Budget Act of 2019 and all related trailer bill legislation implementing the provisions of the Budget Act of 2019, then the suspension shall not take effect. It is the intent of the Legislature to consider alternative solutions to restore this program, should the suspension take effect.

SEC. 7.

Section 120780.6 of the Health and Safety Code is repealed.

120780.6.
Section 120780.5 shall be suspended on December 31, 2021. If the estimates of General Fund revenues and expenditures determined pursuant to Section 12.5 of Article IV of the California Constitution that accompany the May Revision required to be released by May 14, 2021, pursuant to Section 13308 of the Government Code, contain projected annual General Fund revenues that exceed projected annual General Fund expenditures in the 2021–22 fiscal year and the 2022–23 fiscal year by the sum total of General Fund revenues appropriated for all programs suspended pursuant to the Budget Act of 2019 and all related trailer bill legislation implementing the provisions of the Budget Act of 2019, then the suspension shall not take effect. It is the intent of the Legislature to consider alternative solutions to restore this program, should the suspension take effect.

SEC. 8.

Section 120962 of the Health and Safety Code is amended to read:

120962.

(a) (1) For the purpose of verifying financial eligibility pursuant to Section 120960 and the federal Ryan White HIV/AIDS Treatment Extension Act of 2009 (42 U.S.C. Sec. 201 et seq.), the department shall verify the accuracy of the modified adjusted gross income reported on an AIDS Drug Assistance Program application submitted by an applicant or recipient with data, if available, from the Franchise Tax Board.

(2) Notwithstanding any other law, the department shall disclose the name and individual taxpayer identification number (ITIN) or social security number of an applicant for, or recipient of, services under this chapter to the Franchise Tax Board for the purpose of verifying the modified adjusted gross income of, any tax-exempt interest received by, any tax-exempt social security benefits received by, and any foreign earned income of an applicant or recipient pursuant to subdivision (b) of Section 120960.

(b) (1) The Franchise Tax Board, upon receipt of this information, shall inform the department of all of the following:

(A) The amount of the federal adjusted gross income received by the taxpayer household as reported by the taxpayer to the Franchise Tax Board.

(B) The amount of the California adjusted gross income received by the taxpayer household as reported by the taxpayer to the Franchise Tax Board or as adjusted by the Franchise Tax Board.

(C) The amount of any tax-exempt interest received by the ~~taxpayer,~~ taxpayer household, as reported to the Franchise Tax Board.

(D) The amount of any tax-exempt social security benefits received by the ~~taxpayer,~~ taxpayer household, as reported to the Franchise Tax Board.

(E) The amount of any foreign earned income of the ~~taxpayer,~~ taxpayer household, as reported to the Franchise Tax Board.

(F) The family size of the taxpayer household, as reported to the Franchise Tax Board.

(2) The Franchise Tax Board shall provide the information to the department for the most recent taxable year that the Franchise Tax Board has information available, and shall include the first and last name, date of birth, and the ITIN or social security number of the taxpayer.

(c) (1) Information provided by the department pursuant to this section shall constitute confidential public health records as defined in Section 121035, and shall remain subject to the confidentiality protections and restrictions on further disclosure by the recipient under subdivisions (d) and (e) of Section 121025.

(2) To the extent possible, verification of financial eligibility shall be done in a way to eliminate or minimize, by use of computer programs or other electronic means, Franchise Tax Board staff and contractors’ access to confidential public health records.

(3) Prior to accessing confidential HIV-related public health records, Franchise Tax Board staff and contractors shall be required to annually sign a confidentiality agreement developed by the department that includes information related to the penalties under Section 121025 for a breach of confidentiality and the procedures for reporting a breach of confidentiality under subdivision (h) of Section 121022. Those agreements shall be reviewed annually by the department.

(4) The Franchise Tax Board shall return or destroy all information received from the department after completing the exchange of information.

(d) For purposes of this section, “foreign earned income” also includes any deduction taken for the housing expenses of an individual while living abroad pursuant to Section 911 of Title 26 of the Internal Revenue Code.

(e) For purposes of this section, “household” means the applicant or recipient, and, in addition, the applicant’s or recipient’s spouse or registered domestic partner, and all other individuals for whom the applicant or recipient, or the applicant’s or recipient’s spouse or registered domestic partner, is allowed a federal income tax deduction for the taxable year.
(f) For purposes of this section, “family size” has the meaning given to that term in Section 36B(d)(1) of Title 26 of the Internal Revenue Code, and includes same or opposite sex married couples, registered domestic partners, and any dependent, as defined by Section 152 of Title 26 of the Internal Revenue Code, of either spouse or registered domestic partner.

SEC. 9.

Section 120972 of the Health and Safety Code is amended to read:

120972.

(a) To the extent that funds are available for these purposes, the director may establish and administer a program within the department’s Office of AIDS to subsidize certain costs of medications for the prevention of HIV infection and other related medical services, as authorized by this section, to persons who meet all of the following requirements:

(1) Are residents of California who are at least 18 years of age, or who may consent to medical care related to the prevention of a sexually transmitted disease consistent with Section 6926 of the Family Code.

(2) Are HIV negative.

(3) Meet the financial eligibility requirements identified in Section 120960. Unemancipated minors between 12 and 17 years of age shall be considered a family size of one for purposes of determining financial eligibility for this program.

(4) Have been prescribed medication listed on the AIDS Drug Assistance Program (ADAP) formulary as provided in paragraph (2) of subdivision (a) of Section 120955.

(b) To the extent allowable under federal law, and upon available funds, the director may expend funding for this program from the AIDS Drug Assistance Program Rebate Fund as implemented pursuant to Section 120956.

(c) To the extent that funding is made available for this purpose, the program may subsidize all of the following costs of medication for the prevention of HIV infection and related medical services for eligible individuals:

(1) For uninsured individuals, the costs for both of the following:

(A) HIV pre-exposure prophylaxis (PrEP)-related and post-exposure prophylaxis (PEP)-related medical services for individuals who are enrolled, if eligible, in a drug manufacturer’s medication assistance program.

(B) Medication for the prevention of HIV infection for individuals who are ineligible for a drug manufacturer’s medication assistance program.

(2) For insured individuals, the costs for all of the following:

(A) Medication copays, coinsurance, and deductibles for the prevention of HIV infection after the individual’s insurance is applied and, if eligible, after the drug manufacturer’s medication assistance program’s contributions are applied. Use of the drug manufacturer’s medication assistance program is not required if it is not accepted by the health plan or pharmacy contracted with the health plan.

(B) Medical copays, coinsurance, and deductibles for PrEP-related and PEP-related medical services.

(C) Subsidizing premiums to purchase or maintain health insurance coverage for individuals using PrEP if the director makes a determination that it is feasible and would result in cost savings to the state.

(d) For the purposes of this program, an insured individual on a parent’s or partner’s health plan shall be considered uninsured if ~~he or she~~ the individual is unable to use ~~his or her~~ the individual’s health insurance coverage for confidentiality or safety reasons.

(e) Notwithstanding the eligibility requirements in subdivision (a), the program may subsidize ~~all of~~ the ~~following~~ costs of ~~medication~~ up to 30 days of PrEP and PEP medications for the prevention of HIV ~~infection:~~ infection.

~~(1)Up to 14 days of PrEP and PEP medications.~~

~~(2)Up to 28 days of PEP medications for a victim of sexual assault.~~

(f) If the director makes a formal determination that, in any fiscal year, funds appropriated for the program will be insufficient to provide medications for the prevention of HIV infection or related medical costs to existing eligible persons for the fiscal year and that a suspension of the implementation of the program is necessary, the director may suspend either of the following:

(1) The program.

(2) The eligibility determinations and enrollment in the program for the period of time necessary to meet the needs of existing eligible persons in the program.

(g) Reimbursement under the program shall not be made for any drugs or related services that are available to the recipient under any other private, state, or federal programs, or under any other contractual or legal entitlements, except as specified in this section. The director may authorize an exemption from this subdivision if it would result in cost savings to the state.

(h) If the department utilizes a contractor or subcontractor to administer any aspect of the program, the provisions of Section 120970, except subdivision (i) of that section, shall apply.

(i) All types of information, whether written or oral, concerning a client, made or maintained in connection with the administration of this program, shall be confidential, and shall not be used or disclosed except for any of the following:

(1) For purposes directly connected with the administration of the program.

(2) If disclosure is otherwise authorized by law.

(3) Pursuant to a written authorization by the person who is the subject of the record or, if the person is 18 years of age or older, by ~~his or her~~ the person’s guardian or conservator.

(j) For purposes of verifying financial eligibility for the program, the department shall verify the accuracy of the modified adjusted gross income reported by an applicant or recipient of the program, with data, if available, from the Franchise Tax Board. The Franchise Tax Board and the department are authorized to disclose personally identifiable data to one another, solely for this purpose, and in accordance with the data exchange process identified in Section 120962.

(k) Regulations adopted pursuant to subdivision (c), (d), or (e), are exempt from rulemaking provisions 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).

SEC. 10.

Section 122441 of the Health and Safety Code is repealed.

122441.
Section 122440 shall be suspended on December 31, 2021. If the estimates of General Fund revenues and expenditures determined pursuant to section 12.5 of Article IV of the California Constitution that accompany the May Revision required to be released by May 14, 2021, pursuant to Section 13308 of the Government Code, contain projected annual General Fund revenues that exceed projected annual General Fund expenditures in the 2021–22 fiscal year and the 2022–23 fiscal year by the sum total of General Fund revenues appropriated for all programs suspended pursuant to the Budget Act of 2019 and all related trailer bill legislation implementing the provisions of the Budget Act of 2019, then the suspension shall not take effect. It is the intent of the Legislature to consider alternative solutions to restore this program, should the suspension take effect.

SEC. 11.

The heading of Chapter 8.5 (commencing with Section 127671) of Part 2 of Division 107 of the Health and Safety Code is amended to read:

CHAPTER 8.5. Health Care Cost Transparency Database Payments Data Program

SEC. 12.

Section 127671 of the Health and Safety Code is amended to read:

127671.

(a) It The Legislature finds and declares that California has a substantial public interest in the price, cost, utilization, equity, and quality of health care services. California is a major purchaser of health coverage through the Public Employees’ Retirement System, the State Department of Health Care Services, the Department of General Services, the Department of Corrections and Rehabilitation, the California Health Benefit Exchange, and other entities acting on behalf of a state purchaser. California also provides major tax expenditures through the tax exclusion of employer-sponsored coverage and tax deductibility of coverage purchased by individuals, as well as tax deductibility of excess health care costs for individuals and families.

(b) It is the intent of the Legislature in enacting this chapter to establish a system to collect information regarding ~~the cost of health care.~~ health care costs, utilization, quality, and equity. Health care data is reported and collected through many disparate systems. Creating a process to aggregate and use this data will provide greater transparency regarding health care costs, utilization, quality, and equity, and the information may be used to inform policy decisions regarding the provision of quality health care, ~~reduce~~ improving public health, reducing disparities, advancing health coverage, reducing health care costs, oversight of the health care system and health care companies, and ~~reduce health care costs.~~ providing public benefit for Californians and the state, while preserving consumer privacy.

~~(b)~~

(c) It is the intent of the Legislature to improve data transparency to achieve a sustainable health care system with more equitable access to affordable and quality health care for all.

~~(c)~~

(d) It is the intent of the Legislature in enacting this chapter to encourage state agencies, researchers, health care service plans, health insurers, providers, suppliers, and ~~providers~~ other stakeholders to use ~~such~~ this data to develop innovative approaches, services, and programs that may have the potential to deliver health care that is both cost effective and responsive to the needs of enrollees, including recognizing the diversity of California and the impact of social determinants of health.

~~(d)~~

(e) It is the intent of the Legislature that the development of a Health Care ~~Cost Transparency Database~~ Payments Data System be substantially completed no later than July 1, 2023, pursuant to this chapter.

(f) For purposes of this chapter:
(1) “Director” means the Director of the Office of Statewide Health Planning and Development.
(2) “Fund” means the Health Care Payments Data Fund established pursuant to Section 127674.
(3) “Office” means the Office of Statewide Health Planning and Development.
(4) “Program” means the Health Care Payments Data Program established pursuant to Section 127671.1.
(5) “Qualified applicants” includes state agencies, mandatory submitters, established nonprofit research institutions, the University of California, nonprofit educational institutions, providers, suppliers, labor unions, self-insured multiemployer plans that submit data to the system, and consumer organizations certified for the Consumer Participation Program administered by the Department of Managed Health Care pursuant to Section 1348.9 that have been awarded reasonable advocacy and witness fees in a proceeding or proceedings of the department.
(6) “Research” has the same meaning as defined in Section 164.501 of Title 45 of the Code of Federal Regulations.
(7) “System” means the Health Care Payments Data System.

SEC. 13.

Section 127671.1 is added to the Health and Safety Code, to read:

127671.1.
(a) The office shall establish, implement, and administer the Health Care Payments Data Program to implement and administer the system in accordance with this chapter.
(b) The system shall collect data on all California residents to the extent feasible and permissible subject to the state constitutional right to privacy and any other applicable state or federal law.

SEC. 14.

Section 127671.5 of the Health and Safety Code is repealed.

127671.5.
~~The provisions of this chapter shall only be implemented subject to budget appropriation.~~

SEC. 15.

Section 127672 of the Health and Safety Code is amended to read:

127672.

(a) (1) The Office of Statewide Health Planning and Development shall convene a ~~review~~ Health Care Payments Data Program advisory committee, composed of health care stakeholders and experts, including, but not limited to, all of the following:

(A) Health care service plans, including specialized health care service plans.

(B) Insurers that have a certificate of authority from the Insurance Commissioner to provide health insurance, as defined in Section 106 of the Insurance Code.

(D) Providers, as defined in paragraph (2) of subdivision (b) of Section 1367.50.

(E) Self-insured employers.

(F) Multiemployer self-insured plans that are responsible for paying for health care services provided to beneficiaries or the trust administrator for a multiemployer self-insured plan.

(G) Businesses that purchase health care coverage for their employees.

(H) Organized labor.

(I) Organizations representing consumers.

(2) The ~~review~~ advisory committee shall consist of no fewer than nine and no more than 11 persons.

(3) In addition to the members specified by paragraph (2), the director of the office, the director of the State Department of Health Care Services, and the executive director of the California Health Benefit Exchange, or their officially designated representatives, shall be nonvoting ex officio members of the advisory committee.
(4) Each appointed member shall serve a term of two years, except one-half of the initial appointments shall be for one year. Each appointed member shall serve at the discretion of the director and may be removed at any time.
(5) The chairperson of the advisory committee shall be an appointed member and shall be elected by a majority of the appointed members.
(6) The advisory committee shall meet at least quarterly or when requested by the director.
(7) The advisory committee shall assist and advise the director in formulating program policies regarding data collection, management, use, and access, and development of public information to meet the goals of the program. The advisory committee shall, through its meetings, provide a forum for stakeholder and public engagement. Upon request of the director, the advisory committee may assist and advise on the office’s other data programs.
~~(3)The review~~

(8) On or before July 1, 2024, the advisory committee shall ~~advise~~ make recommendations to the office on how existing state public health data functions may be integrated into the ~~establishment, implementation, and ongoing administration of the database, including a business plan~~ system. The advisory committee shall also recommend options for ~~sustainability without using moneys from~~ state public health data integration. These recommendations shall be published on the ~~General Fund.~~ office’s internet website.

~~(4)~~

(9) The ~~review~~ advisory committee shall not have decisionmaking authority related to the administration of the ~~database~~ system and shall not have a financial interest, individually or through a family member, in the recommendations made to the office. The ~~review~~ advisory committee shall hold public meetings with stakeholders, solicit input, and set its own meeting agendas. Meetings of the ~~review~~ advisory committee are subject to the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code).

~~(5)~~

(10) The members of the ~~review~~ advisory committee appointed from outside government shall serve without compensation, but shall receive a per diem for each day’s attendance at an advisory committee meeting. All members shall be reimbursed for any actual and necessary expenses incurred in connection with their duties as members of the committee.

(b)The office may consider recommendations contained within the Health Care Cost, Quality, and Equity Data Atlas Technical Feasibility Analysis dated March 1, 2017, prepared pursuant to Section 127670. In addition, the office shall review information collected by the state in various health care data systems to identify gaps between available data and recommended data. The office may utilize third-party vendors to assist with the implementation of these provisions. The vendor shall prepare a plan, for submission to the office, for completing a Health Care Cost Transparency Database and identify which elements of the system can be addressed using the appropriation included in the 2018–19 Budget Act. To the extent available funding is insufficient to address all elements identified, the plan shall prioritize the key components needed to best support health care cost transparency.

(c)The office shall develop a guidance to require data submission from the entities specified in paragraph (1) of subdivision (a). That guidance shall include a methodology for the collection, validation, refinement, analysis, comparison, review and improvement of health care data, including, but not limited to, data from fee-for-service, capitated, integrated delivery system, and other alternative, value-based, payment sources, submitted by entities specified in paragraph (1) of subdivision (a). The guidance shall also consider data elements proposed by the All-Payer Claims Database Council, the University of New Hampshire, the National Association of Health Data Organizations, Medi-Cal, and Medicare, among others.

(d)(1)No later than July 1, 2020, the office shall submit a report to the Legislature in compliance with Section 9795 of the Government Code, based on recommendations of the review committee and any third-party vendor, that does all of the following:

~~(A)Includes information on the types of data, including those specified in subdivision (b) of Section 127673, purpose of use, and use case definitions to assist in prioritizing areas of development.~~

~~(B)Specifies entities and individuals required to report data, including those specified in Section 127673.~~

~~(C)Defines and prioritizes data elements to collect, including the requirements for data linkages to meet specified purposes and use cases.~~

~~(D)Analyzes data aggregation and the protection of individual confidentiality to advise on privacy and security.~~

~~(E)Analyzes and provides advice regarding existing technology, existing systems, and available data that can be leveraged to ensure a streamlined system.~~

~~(2)The report shall also include recommendations including the following:~~

(A)Additional legislation needed to ensure the database receives appropriate data from identified data submitters including, those specified in subdivision (b) of Section 127673 and legislation regarding enforcement mechanisms necessary for these entities to comply with the requirements of the chapter.

~~(B)Legislation needed to protect individual privacy rights and confidentiality of the data.~~

~~(C)A plan for long-term, non-General Fund financing to support the ongoing costs of maintaining the database.~~

(D)The type of technology solutions required pursuant to Section 127670, including whether to build a new database or leveraging databases, or developing a network of networks to facilitate a hybrid version of the two options.

~~(E)Identification of governance structure, including identification of the appropriate entity to operate the database.~~

~~(F)How the database can map to other datasets, including public health datasets on morbidity and mortality, and data regarding the social determinants of health.~~

(e)For purposes of implementing this chapter, including, but not limited to, hiring staff and consultants, facilitating and conducting meetings, conducting research and analysis, and developing the required reports, the

(b) The office may ~~enter into exclusive~~ convene other committees or ~~nonexclusive contracts on a bid or negotiated basis. Contracts entered into or amended pursuant~~ workgroups as necessary to ~~this section are exempt from Chapter 6 (commencing with Section 14825)~~ support effective operation of ~~Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130~~ the system. These committees may be standing committees or time-limited workgroups, at the discretion of the ~~Government Code, and Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and are exempt from the review or approval of any division of the Department of General Services.~~ director.

SEC. 16.

Section 127672.8 is added to the Health and Safety Code, to read:

127672.8.
The office shall ensure that the system can map to other datasets, including public health datasets on morbidity and mortality, and data regarding the social determinants of health.

SEC. 17.

Section 127672.9 is added to the Health and Safety Code, to read:

127672.9.
Until January 1, 2026, for purposes of implementing this chapter, including, but not limited to, hiring staff and consultants, facilitating and conducting meetings, conducting research and analysis, and developing the required reports, the office may enter into exclusive or nonexclusive contracts on a bid or negotiated basis. Contracts entered into or amended pursuant to this section are exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code and Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and are exempt from the review or approval of any division of the Department of General Services.

SEC. 18.

Section 127673 of the Health and Safety Code is repealed.

127673.
(a)Subject to appropriation, after the requirements of Section 127672 are fulfilled and a long term non-General Fund financing mechanism has been implemented, the office or its designee shall establish, implement, and administer the Health Care Cost Transparency Database in accordance with this chapter.
(b)After the requirements of Section 127672 are fulfilled, for the purpose of developing information for inclusion in the database, a health care service plan, including a specialized health care service plan, an insurer licensed to provide health insurance, as defined in Section 106 of the Insurance Code, a self-insured employer subject to Section 1349.2, health entities contracted pursuant to Section 14087.3 of the Welfare and Institutions Code, a supplier, as defined in paragraph (3) of subdivision (b) of Section 1367.50, or a provider, as defined in paragraph (2) of subdivision (b) of Section 1367.50, shall, and a self-insured employer not subject to Section 1349.2 and a multiemployer self-insured plan that is responsible for paying for health care services provided to beneficiaries and the trust administrator for a multiemployer self-insured plan may, provide all of the following to the office:
(1)Utilization data from the health care service plans’ and insurers’ medical payments or, in the case of entities that do not use payments data, including, but not limited to, integrated delivery systems, encounter data consistent with the core set of data elements for data submission proposed by the All-Payer Claims Database Council, the University of New Hampshire, and the National Association of Health Data Organizations.
~~(2)Pricing information for health care items, services, and medical and surgical episodes of care gathered from payments for covered health care items and services.~~
(c)The office or its designee shall receive the information, as described in this section, and report that information in a form that allows valid comparisons across care delivery systems. Policies and procedures shall be developed to outline the format and type of data to be submitted pursuant to subdivision (b).
(d)In the development of the database, the office or its designee shall consult with state entities as necessary to implement the Health Care Cost Transparency Database. State entities shall assist and provide to the office access to such datasets to effectuate the intent of this chapter.
(e)All policies and procedures developed in the performance of this chapter shall ensure that the privacy, security, and confidentiality of individually identifiable health information is protected.
(f)The office shall develop policy regarding data aggregation and the protection of individual confidentiality, privacy, and security. Individual patient-level data shall be exempt from the disclosure requirements of the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code), and shall not be made available except pursuant to this chapter or the Information Practices Act of 1977 (Chapter 1 (commencing with Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code) until the office has developed a policy regarding the release of that data.
(g)(1)Upon operation of the database and receipt of sufficient data, the office or its designee shall receive, process, maintain, and analyze information from data sources, including, but not limited to, data received pursuant to subdivision (b) and payments from private and public payers.
~~(2)The office or its designee shall include in an analysis performed pursuant to paragraph (1), but shall not limit the content of that analysis to, any of the following:~~
~~(A)Population and regional level data on prevention, screening, and wellness utilization.~~
~~(B)Population and regional level data on chronic conditions, management, and outcomes.~~
~~(C)Population and regional level data on trends in utilization of procedures for treatment of similar conditions to evaluate medical appropriateness.~~
~~(D)Regional variation in payment level for the treatment of identified chronic conditions.~~
~~(E)Data regarding hospital and nonhospital payments, including inpatient, outpatient, and emergency department payments and nonhospital ambulatory service data.~~

SEC. 19.

Section 127673 is added to the Health and Safety Code, to read:

127673.
(a) The office shall develop guidance to require data submission from the entities specified in this chapter. The guidance shall include a methodology for the collection, validation, refinement, analysis, comparison, review, and improvement of health care data to be submitted by entities specified in this chapter, including, but not limited to, data from fee-for-service, capitated, integrated delivery system, and other alternative, value-based, payment sources, and any other form of payment to health care providers and suppliers by health plans, health insurers, or other entities described in this chapter.
(b) Notwithstanding any other state law, for the purpose of providing information for inclusion in the system, mandatory submitters shall, and voluntary submitters may, provide health care data, including claim and encounter, member enrollment, provider and supplier information, nonclaims-based payments, premiums, and pharmacy rebate data, and provide all of the following to the office:
(1) Utilization data from the health care service plans’ and insurers’ medical payments or, in the case of entities that do not use payments data, including, but not limited to, integrated delivery systems, encounter data consistent with the core set of data elements for data submission proposed by the All-Payer Claims Database Council, the University of New Hampshire, and the National Association of Health Data Organizations.
(2) Pricing information for health care items, services, and medical and surgical episodes of care gathered from payments for covered health care items and services, including contracted rates, allowed amounts, fee schedules, and other information regarding the cost of care necessary to determine the amounts paid by health plans, health insurers, and public programs to health care providers, suppliers, and other entities. This shall include nonclaims-based payment information such as deductibles, copayments, and coinsurance and other information as needed to determine the total cost of care.
(3) Personally identifiable information that the mandatory submitter is otherwise required to collect, which may include detailed patient identifiers such as first and last name, address, date of birth, gender or gender identity, and Social Security Number or individual taxpayer identification number, in order to support analyses, including, but not limited to, longitudinal, public health impacts, and social determinants of health analyses. Personally identifiable information shall be subject to the privacy protections of this chapter and shall not be publicly available, except as specified in this chapter.
(4) Personal health information that the mandatory submitter is otherwise required to collect, which may include age, gender, gender identity, race, ethnicity, sexual orientation, health status, health condition, and any other data elements that constitute personal health information in this chapter.
(c) For purposes of this chapter, “mandatory submitters” include all of the following:
(1) A health care service plan, including a specialized health care service plan.
(2) An insurer licensed to provide health insurance, as defined in Section 106 of the Insurance Code, including dental-only insurance.
(3) A self-insured plan subject to Section 1349.2, or a state entity, city, county, or other political subdivision of the state, or a public joint labor management trust, that offers self-insured or multiemployer-insured plans that pay for or reimburse any part of the cost of health care services.
(4) The State Department of Health Care Services, for those enrolled in Medi-Cal and other insurance affordability programs, whether enrolled in Medi-Cal managed care, fee-for-service Medi-Cal, or any other payment arrangement.
(d) The office will accept, at its discretion, voluntarily submitted data. For purposes of this chapter, “voluntary submitters” include, but are not limited to:
(1) A self-insured employer that is not subject to Section 1349.2.
(2) A multiemployer self-insured plan that is responsible for paying for health care services provided to beneficiaries.
(3) The trust administrator for a multiemployer self-insured plan.
(4) A provider, as defined in paragraph (2) of subdivision (b) of Section 1367.50, that is a hospital or clinic.
(5) A supplier, as defined in paragraph (3) of subdivision (b) of Section 1367.50, that has an independent scope of practice and submits claims electronically.
(e) On or before December 31, 2021, the office shall adopt emergency regulations pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 to implement this chapter, including on all of the following:
(1) Plan size thresholds for submitters, with consideration given to implementation costs for both the submitter and the office. Thresholds shall not apply to qualified health plans offered by the California Health Benefit Exchange or submitters covering more than a total of 50,000 Californians through both Medicare Advantage plans and the private plans and insurance described in subdivision (b).
(2) Required and exempted lines of business.
(3) Coordination of submission in cases where submitters contract with other entities to administer health care benefits.
(4) The content, file formats, and timelines for data submission, and the methods of data collection. In the development of regulations, the office shall consider national, regional, and other all-payer claims databases’ standards.
(5) Frequency of submission by health plans, insurers, and other mandatory submitters of all core data, including claims, encounters, eligibility, and provider files.
(6) Frequency of submission of nonclaims payment data files.
(f) The initial adoption, by the office, of regulations implementing subdivision (e) shall be deemed to be an emergency and necessary to avoid serious harm to the public peace, health, safety, or general welfare for purposes of Sections 11346.1 and 11349.6 of the Government Code. Any emergency regulation adopted pursuant to this section shall be repealed by operation of law unless the adoption, amendment, or repeal of the regulation is promulgated by the office pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code within two years of the initial adoption of the emergency regulation. After the adoption of the emergency regulation pursuant to subdivision (e), the office may thereafter establish regulations pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
(g) (1) A qualified health plan shall submit information either directly or through the California Health Benefit Exchange, as determined by the exchange.
(2) The State Department of Health Care Services shall submit information for those enrolled in Medi-Cal and other insurance affordability programs, whether enrolled in Medi-Cal managed care, fee-for-service Medi-Cal, or any other payment arrangement.
(h) (1) In its initial implementation, the office shall seek data for the three years prior to the effective date of this chapter.
(2) In ongoing administration of the system, the office shall provide data for no less than three years and may seek data for longer time periods to support the intent of this chapter.
(i) To the extent possible, the office shall incorporate into the system any data collected by the office from providers and suppliers, including hospital discharge abstract data records and emergency care data records provided to the office by health facilities and ambulatory surgery data records provided to the office by ambulatory surgical centers.
(j) The office may accept and incorporate into the system any available information that will further the goals of the program.
(k) (1) On or before March 1, 2024, the office shall submit a report to the Legislature that includes all of the following:
(A) Claims data reported by mandatory submitters.
(B) Claims data reported by voluntary submitters.
(C) Data on the covered lives reported, percentage of the population for which the office has data, the number of self-insured plans, providers and suppliers who have voluntarily submitted data, variation of completeness of data across geographic regions, such as the California Health Benefit Exchange’s rating regions, the extent of data submitted on hospitals, physicians, and physician groups, the extent to which mandatory and voluntary submitters are submitting data specified in subdivision (b), frequency of submission of all core data, including claims, encounters, eligibility, and provider files, frequency of submission of nonclaims payment data files, and any other information that is available to determine if hospital and physician data are captured.
(D) A cost estimate if providers and suppliers become mandatory submitters.
(E) The number of data requests from qualified applicants and their data uses.
(2) The office may request the data release committee established pursuant to Section 127673.84 to assist with the report.
(3) The report shall be submitted in compliance with Section 9795 of the Government Code.
(l) Entities regulated pursuant to Article 4.7 (commencing with Section 742.20) of Part 2 of Division 1 of the Insurance Code are exempt from this chapter.
(m) The program performs public health activities described in subdivision (b) of Section 164.512 of Title 45 of the Code of Federal Regulations. The information collected in accordance with this chapter is necessary to carry out projects with public health purposes.
(n) Article 8 (commencing with Section 1798.30) of Chapter 1 of Title 1.8 of Part 4 of Division 3 of the Civil Code shall not apply to records and personal information collected by the system pursuant to this section.

SEC. 20.

Section 127673.1 is added to the Health and Safety Code, to read:

127673.1.
(a) (1) The office shall report the information it receives pursuant to this chapter in a form that allows valid comparisons across care delivery systems.
(2) The office shall develop policies and procedures to outline the format and type of data to be submitted pursuant to this chapter.
(b) All entities submitting health care data are responsible for submitting complete and accurate data directly to the system and facilitating data submissions from data owners, including, but not limited to, data feeds from pharmacy benefit managers, behavioral health organizations, and any subsidiaries, affiliates, or subcontractors that a submitter has contracted with for services covered by this chapter.

SEC. 21.

Section 127673.2 is added to the Health and Safety Code, to read:

127673.2.
(a) In the development of the system, the office or its designee shall consult with state and federal entities, as necessary, to implement the program. State entities shall assist and provide to the office access to datasets needed to effectuate the intent of this chapter.
(b) The office shall seek data on Medicare enrollees from the federal Centers for Medicare and Medicaid Services and shall incorporate that data, to the extent possible.
(c) The office shall accept data from voluntary submitters if it is provided in a manner and format specified by the office.

SEC. 22.

Section 127673.3 is added to the Health and Safety Code, to read:

127673.3.
(a) The office shall develop and maintain a master person index, a master index of providers and suppliers, and a master payer index that will enable the matching of California residents longitudinally and across coverage sources, and will enable the matching of providers and suppliers across practice arrangements, payment sources, and regulators.
(b) The office shall supplement these indices with data from other public and private sources, such as the following:
(1) Other data maintained by the office.
(2) Vital statistics.
(3) Facility licensure data from the State Department of Public Health.
(4) Health professional licensure data from the Department of Consumer Affairs.
(5) Private sources of valid and reliable data, such as a provider and supplier directory utility if it is demonstrably accurate over time.

SEC. 23.

Section 127673.4 is added to the Health and Safety Code, to read:

127673.4.
(a) The office shall develop regulations on data quality and improvement processes and shall make these processes publicly available.
(b) Data quality processes shall be applied to each major phase of the system life cycle, including, but not limited to:
(1) Source data intake.
(2) Data conversion and processing.
(3) Data analysis, reporting, and release.
(4) Other data processes necessary for the system.
(c) The office shall provide, upon request of an interested party, to the interested party, and shall regularly report to the health care data policy advisory committee, information on data quality and data quality improvement processes, including, but not limited to, the following:
(1) Descriptions of processes and methodologies.
(2) Periodic updates on known issues and the implications of the issues for data quality and data availability.
(3) Other impediments to the functioning of the system.

SEC. 24.

Section 127673.5 is added to the Health and Safety Code, to read:

127673.5.
(a) (1) The purpose of the system is to learn about and seek to improve public health, population health, social determinants of health, and the health care system, not about individual patients.
(2) All policies and procedures developed in implementing this chapter shall ensure that the privacy, security, and confidentiality of consumers’ individually identifiable health information is protected, consistent with state and federal privacy laws.
(b) The office shall develop policies regarding data aggregation and the protection of individual confidentiality, privacy, and security for individual consumers and patients.

SEC. 25.

Section 127673.6 is added to the Health and Safety Code, to read:

127673.6.
The office shall develop an information security program that uses existing state standards and complies with applicable state and federal laws.

SEC. 26.

Section 127673.7 is added to the Health and Safety Code, to read:

127673.7.
The office shall include in an annual analysis, such as, but not limited to, the following:
(a) Population and regional level data on prevention, screening, and wellness utilization.
(b) Population and regional level data on chronic conditions, management, and outcomes.
(c) Population and regional level data on trends in utilization of procedures for treatment of similar conditions to evaluate medical appropriateness.
(d) Regional variation in payment level for the treatment of identified chronic conditions.
(e) Data regarding hospital and nonhospital payments, including inpatient, outpatient, and emergency department payments and nonhospital ambulatory service data.

SEC. 27.

Section 127673.8 is added to the Health and Safety Code, to read:

127673.8.
(a) The office shall use the program data to produce publicly available information, including data products, summaries, analyses, studies, and other reports, to support the goals of the program. The office shall receive input on priorities for the public information portfolio from the advisory committee. The office may establish a pricing mechanism for data products.
(b) The office may establish a public liaison function through which individuals may submit requests for specific products or analyses. The office may establish a pricing mechanism for custom reports. The office shall maintain copies of custom reports as part of the program public information portfolio.
(c) The office may establish a research program to conduct research, as defined in Section 164.501 of Title 45 of the Code of Federal Regulations, to support program policy goals.
(d) Publicly available data products and reports shall protect patient and consumer privacy.

SEC. 28.

Section 127673.81 is added to the Health and Safety Code, to read:

127673.81.
(a) (1) All personal consumer information obtained or maintained by the program shall be confidential.
(2) Only deidentified aggregate patient or other consumer data shall be included in a publicly available analysis, data product, or research.
(b) All policies and procedures developed in implementing this chapter shall ensure that the privacy, security, and confidentiality of consumers’ individually identifiable health information is protected, consistent with state and federal privacy laws, including the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA)(Public Law 104-191) and the Confidentiality of Medical Information Act (Part 2.6 (commencing with Section 56) of Division 1 of the Civil Code), and data shall not be disclosed until the office has developed a policy regarding the release of data.
(c) (1) The system and all program data shall be exempt from the disclosure requirements of the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code), and shall not be made available except pursuant to this chapter.
(2) The office shall develop policies and procedures for the disclosure of information described in paragraph (2) of subdivision (a).
(d) Program data shall not be used for determinations regarding individual patient care or treatment and shall not be used for any individual eligibility or coverage decisions or similar purposes.

SEC. 29.

Section 127673.82 is added to the Health and Safety Code, to read:

127673.82.
(a) The office shall develop a comprehensive program for data use, access, and release that includes data use agreements that require data users to comply with this chapter. The purpose of the data use, access, and release program is to ensure that only aggregated, deidentified information is publicly accessible.
(b) Access to nonpublic data shall be governed by the data use, access, and release program.
(c) To meet the research and policy goals of the program, controlled access to nonpublic data by outside data analysts, researchers, and other qualified applicants is necessary.
(d) The office shall establish a secure research environment for access to potentially identifiable information. The environment shall include access controls sufficient to ensure that users access only the data specified in an approved data request and that personal information is protected from unapproved use.
(e) The office shall, with the advice of the advisory committee and data release committee, develop criteria, policies, and procedures for access to and release of nonpublic data. The policies shall be designed to recognize a patient’s right of privacy and shall include at least the privacy protection standards specified in Section 127673.83.
(f) The office shall establish a pricing mechanism for the use of nonpublic data.
(g) The office shall maintain information about requests and the disposition of requests, and shall develop processes for the timely consideration and release of nonpublic data.

SEC. 30.

Section 127673.83 is added to the Health and Safety Code, to read:

127673.83.
(a) In accessing or obtaining nonpublic data through the secure environment, users shall only have access to the minimum amount of potentially identifiable data necessary for an approved project or access to a dataset designed for an approved purpose. Each person who accesses or obtains nonpublic personal data shall sign a data use agreement. Violation of a data use agreement shall be considered a violation of Section 1798.56 of the Civil Code and, if applicable, Section 1798.57 of the Civil Code.
(b) Access to data in the secure research environment shall be permissible as follows:
(1) If the data does not include any of the direct personal identifiers listed in Section 164.514(e) of Title 45 of the Code of Federal Regulations, access may be provided to qualified applicants for research and analysis purposes consistent with program goals.
(2) If the data includes any of the direct personal identifiers listed in Section 164.514(e) of Title 45 of the Code of Federal Regulations, access may be provided only to qualified applicants for research projects that offer significant opportunities to achieve program goals and meet all of the following criteria:
(A) Project approval has been recommended by the data release committee.
(B) The project has been approved by the Committee for the Protection of Human Subjects pursuant to subdivision (t) of Section 1798.24 of the Civil Code. Pursuant to that section, the office may release data to established nonprofit research institutions, the University of California, and other nonprofit educational institutions.
(C) The requester has documented expertise with privacy protection and with the analysis of large sets of confidential data.
(D) The research shall be made available to the office.
(c) The office’s policies shall limit release or transmittal of personal information outside the secure environment.
(1) The office may develop standardized limited datasets that do not include any of the direct personal identifiers listed in Section 164.514(e) of Title 45 of the Code of Federal Regulations, and have the minimum necessary personal information for types of purposes specified by the office. Standardized datasets may be transmitted to qualified applicants if the requester has documented expertise with privacy protection and with the analysis of large sets of confidential data, data security will meet the standards that the office shall apply to personal data, and project approval has been recommended by the data release committee.
(2) Data described in paragraph (2) of subdivision (b) may be transmitted to an outside researcher only if the researcher meets all the criteria of that paragraph, the researcher has documented expertise with data security and the protection of large sets of confidential data, and data security will meet the standards that the office shall apply to personal data.
(d) Program data, including personal information, may be shared with other state agencies pursuant to subdivision (e) of Section 1798.24 of the Civil Code. For purposes of that section, personal information has been collected for the purposes specified in Section 127671, which include analyzing and improving state programs related to public health and the provision of health care or health care coverage.

SEC. 31.

Section 127673.84 is added to the Health and Safety Code, to read:

127673.84.
(a) The office shall establish a data release committee with a membership of at least 7 and no more than 11 members appointed by the director. Notwithstanding any other law, a quorum shall be achieved with one fewer member than one-half of the full membership.
(b) The appointed members shall include representatives of health care payers, providers, suppliers, purchasers, researchers, consumers, and labor. Representatives of program data submitters shall not constitute a majority of members. The members shall have knowledge and experience with health care data, privacy, and security.
(c) Each appointed member shall serve a term of two years, except one-half of the initial appointments shall be for one year. The director may remove a member for cause.
(d) (1) The data release committee shall make recommendations about all applications seeking either program data with direct personal identifiers or the transmission of standardized datasets, except for data requests from other state agencies. Upon request of the director, the data release committee shall also make recommendations about other applications for program data.
(2) In making recommendations about applications seeking program data, except for data requests from other state agencies, the data release committee shall consider whether the use of the data is consistent with the goals of the system, whether it provides greater transparency regarding health care costs, utilization, quality, or equity, or how the information may be used to inform policy decisions regarding the provision of quality health care, improving public health, reducing health disparities, advancing health coverage, or reducing health care costs.
(e) Upon request of the director, the data release committee shall generally advise the director about privacy and security matters related to the program and provide feedback on the program’s data application review processes and other matters.
(f) The chairperson of the data release committee shall be appointed from among the members by the director.
(g) A member of the data release committee appointed from outside state government shall serve without compensation, but shall receive a per diem for each day’s attendance at a data release committee meeting. All members shall be reimbursed for any actual and necessary expenses incurred in connection with their duties as members of the committee.

SEC. 32.

Section 127674 of the Health and Safety Code is repealed.

127674.
The office or its designee shall not implement, or operate, the database if there is a determination, after consultation with the review committee, that the office is unable to obtain necessary, reliable, and relevant data.

SEC. 33.

Section 127674 is added to the Health and Safety Code, to read:

127674.
(a) The office shall expend the General Fund moneys appropriated in the 2018–19 Budget Act (Chapter 23 of the Statutes of 2019) for the purposes of this chapter and the former Health Care Transparency Database to fund the implementation and operation of the program.
(b) The Health Care Payments Data Program shall not be funded with General Fund moneys beyond moneys appropriated in the 2018–19 Budget Act.
(c) The Health Care Payments Data Fund is hereby established within the office for the purpose of receiving and expending revenues collected pursuant to this chapter.
(d) All revenues collected pursuant to this chapter shall be deposited in the fund. Any amounts raised by the collection of the revenues shall remain in the fund and shall be available in succeeding years upon appropriation by the Legislature.
(e) The office shall seek to maximize federal financial participation from the Medicaid program for the system, working through the sole state agency for Medicaid, the State Department of Health Care Services, and shall do so while relying on moneys appropriated from the General Fund in the 2018–19 Budget Act, and on an ongoing basis using any federally allowed fund source for the state match.
(f) (1) The office may impose a data user fee for an eligible user that is in compliance with this chapter, including, but not limited to, provisions related to consumer privacy and data security.
(2) In establishing the user fee schedule and fee waivers, the office shall work with the advisory committee to make considerations for state agencies, data submitters, and consumer organizations that have been awarded reasonable advocacy and witness fees in a proceeding or proceedings of the Department of Managed Health Care pursuant to Section 1348.9.
(3) The office shall adopt regulations on the fee waiver consistent with subdivisions (e) and (f) of Section 127673.
(g) On or before March 1, 2023, the office shall submit a report to the Legislature on recommendations for funding options for the program pursuant to Section 9795 of the Government Code.
(h) The office may accept foundation funding from foundations not affiliated or controlled by a health care entity.

SEC. 34.

Section 127674.1 is added to the Health and Safety Code, to read:

127674.1.
The office shall notify the Department of Managed Health Care or the Department of Insurance, as appropriate, if a health care service plan or health insurer fails to comply with this chapter. The Department of Managed Health Care and the Department of Insurance shall take appropriate action necessary to bring the plan or insurer into compliance.

SEC. 35.

Chapter 4.1 (commencing with Section 10403) is added to Part 2 of Division 2 of the Insurance Code, to read:

CHAPTER 4.1. General Regulation of Health Insurers
10403.
A health insurer that is subject to the requirements of Chapter 8.5 (commencing with Section 127671) of Part 2 of Division 107 of the Health and Safety Code and that fails to comply with the data submission requirements of that chapter is subject to a civil penalty not to exceed five thousand dollars ($5,000) for each 30-day period in which the insurer fails to comply. If the failure to comply is willful, the insurer is subject to a civil penalty not to exceed ten thousand dollars ($10,000) for each 30-day period in which the person fails to comply. The aggregate penalty for each instance of noncompliance shall not exceed one hundred thousand dollars ($100,000). In determining the penalty, the commissioner shall consider the good faith of the insurer and any similar prior violations by the insurer.

SEC. 36.

Section 10112.296 of the Insurance Code is amended to read:

10112.296.

Notwithstanding paragraph (1) of subdivision (b) of Section 10112.295 and paragraph (1) of subdivision (b) of Section 10112.297, the actuarial value for a nongrandfathered bronze level ~~high deductible~~ health insurance policy that is either covers and pays for at least one major service, other than preventive services, before the deductible or meets the requirements to be a high deductible health plan, as defined in Section 223(c)(2) of Title 26 of the United States Code, may range from plus 4 5 percent to minus 2 percent.

SEC. 37.

Section 19548.2 of the Revenue and Taxation Code is amended to read:

19548.2.

(a) Notwithstanding any other law and in accordance with Section 120962 of the Health and Safety Code, the State Department of Public Health shall disclose the name and individual taxpayer identification number (ITIN) or social security number of an applicant for, or recipient of services pursuant to Chapter 6 (commencing with Section 120950) of Part 4 of Division 105 of the Health and Safety Code to the Franchise Tax Board for the purpose of verifying the modified adjusted gross income of, any tax-exempt interest received by, any tax-exempt social security benefits received by, and any foreign earned income of an applicant or recipient.

(b) (1) The Franchise Tax Board, upon receipt of this information, shall inform the State Department of Public Health of all of the following:

(A) The amounts of the federal adjusted gross income received by the taxpayer household as reported by the taxpayer to the Franchise Tax Board.

(B) The amounts of the California adjusted gross income received by the taxpayer household as reported by the taxpayer to the Franchise Tax Board or as adjusted by the Franchise Tax Board.

(C) The amount of any tax-exempt interest received by the ~~taxpayer,~~ taxpayer household, as reported to the Franchise Tax Board.

(D) The amount of any tax-exempt social security benefits received by the ~~taxpayer,~~ taxpayer household, as reported to the Franchise Tax Board.

(E) The amount of any foreign earned income of the ~~taxpayer,~~ taxpayer household, as reported to the Franchise Tax Board.

(F) The family size of the taxpayer household, as reported to the Franchise Tax Board.

(2) The Franchise Tax Board shall provide the information to the State Department of Public Health for the most recent taxable year that the Franchise Tax Board has information available, and shall include the first and last name, date of birth, and the ITIN or social security number of the taxpayer.

(c) (1) Information provided by the State Department of Public Health pursuant to this section shall constitute confidential public health records as defined in Section 121035 of the Health and Safety Code, and shall remain subject to the confidentiality protections and restrictions on further disclosure by the recipient under subdivisions (d) and (e) of Section 121025.

(2) Prior to accessing confidential HIV-related public health records, Franchise Tax Board staff and contractors shall be required to annually sign a confidentiality agreement developed by the State Department of Public Health that includes information related to the penalties under Section 121025 of the Health and Safety Code for a breach of confidentiality and the procedures for reporting a breach of confidentiality under subdivision (h) of Section 121022 of the Health and Safety Code. Those agreements shall be reviewed annually by the State Department of Public Health.

(3) The Franchise Tax Board shall return or destroy all information received from the State Department of Public Health after completing the exchange of information.

SEC. 38.

Section 4107 of the Welfare and Institutions Code is amended to read:

4107.

(a) The security of patients committed pursuant to Section 1026 of, and Chapter 6 (commencing with Section 1367) of Title 10 of Part 2 of, the Penal Code, and former Sections 6316 and 6321, at Patton State Hospital shall be the responsibility of the Secretary of the Department of Corrections and Rehabilitation.

(b) The Department of Corrections and Rehabilitation and the State Department of Mental Health shall jointly develop a plan to transfer all patients committed to Patton State Hospital pursuant to the provisions in subdivision (a) from Patton State Hospital no later than January 1, 1986, and shall transmit this plan to the Senate Committee on Judiciary and to the Assembly Committee on Criminal Justice, and to the Senate Health and Welfare Committee and Assembly Health Committee by June 30, 1983. The plan shall address whether the transferred patients shall be moved to other state hospitals or to correctional facilities, or both, for commitment and treatment.

(c) Notwithstanding any other ~~provision of~~ law, the State Department of State Hospitals shall house no more than 1,336 patients at Patton State Hospital. However, until September ~~2020,~~ 2030, up to 1,530 patients may be housed at the hospital.

(d) This section shall remain in effect only until all patients committed, pursuant to the provisions enumerated in subdivision (a), have been removed from Patton State Hospital and shall have no force or effect on or after that date.

SEC. 39.

Section 4300 of the Welfare and Institutions Code is amended to read:

4300.

As used in this chapter, “officers” of a state hospital means:

(a) ~~Clinical~~ Medical director.

(b) Hospital administrator.

(d) Chief of police services at the hospital.

(e) Any other hospital employee appointed and deemed by the Director of State Hospitals to be an officer.

SEC. 40.

Section 4301 of the Welfare and Institutions Code is amended to read:

4301.

(a) The Director of State Hospitals shall appoint and define the duties, subject to the laws governing civil service, of ~~the clinical director, the hospital administrator, the hospital director, and the chief~~ all of ~~police services for each state hospital.~~ the following officers:

(1) A hospital administrator.
(2) A hospital director.
(3) A chief of police services.
(4) Any other hospital employee appointed and deemed by the Director of State Hospitals to be an officer.

(b) The Director of State Hospitals shall appoint a program director for each program at a state hospital.

(c) The Governor, upon the recommendation of the Director of State Hospitals, shall appoint one medical director for the department and one medical director for each state hospital. The medical director of the department shall be a physician licensed to practice medicine in California and shall be responsible for standards, research, coordination, surveillance, and planning for the improvement of medical care for the department.

SEC. 41.

Section 4305 of the Welfare and Institutions Code is amended to read:

4305.

(a) Subject to the rules and regulations established by the department, and under the supervision of the hospital ~~director when~~ director, the ~~hospital~~ medical director ~~is the hospital administrator, the clinical director~~ of ~~each~~ a state hospital shall be responsible for the planning, development, direction, management, supervision, and evaluation of ~~all patient services, and of the supervision of research and clinical training.~~ medical care provided.

(b) A medical director of a state hospital shall be a physician who has passed, or shall pass, an examination for a license to practice medicine in California and shall be a qualified specialist in a branch of medicine that includes diseases affecting the brain and nervous system. The medical director of a state hospital shall be well qualified by training or experience to have proven skills in mental hospital program administration.

SEC. 42.

Section 4306 of the Welfare and Institutions Code is amended to read:

4306.

(a) Subject to the rules and regulations established by the department, under the supervision of the hospital ~~director when the hospital director is the clinical~~ director, the hospital administrator shall be responsible for the planning, development, direction, management and supervision of all administrative and supportive services in the hospital facility. ~~Such~~ These services include, but are not limited ~~to:~~ to, all of the following:

(1) All administrative ~~functions~~ functions, such as personnel, accounting, budgeting, and patients’ accounts.

(2) All life-support ~~functions~~ functions, such as food services, facility maintenance and patient supplies.

(3) All other business ~~and security~~ functions.

(b) It shall be the responsibility of the hospital administrator to provide support services, as specified in this section, within available resources, to all hospital treatment programs.

SEC. 43.

Section 4307 of the Welfare and Institutions Code is amended to read:

4307.

The hospital director is the chief executive officer of the hospital and is responsible for all hospital operations. If the hospital director is the clinical director, then the hospital administrator is responsible to him; if the hospital director is the hospital administrator, then the clinical director is responsible to him.

SEC. 44.

Section 4308 of the Welfare and Institutions Code is amended to read:

4308.

(a) If a vacancy occurs in a hospital under the jurisdiction of the Director of State Hospitals, ~~he or she~~ the Director of State Hospitals shall appoint, as provided in Section 4301, a ~~clinical director, a~~ hospital administrator, a hospital director, and program directors.

(b) A hospital administrator shall be ~~a college graduate, preferably with an advanced degree in hospital,~~ selected based on their overall knowledge of the hospital and the operation of its administrative, business, ~~or public administration~~ and life-support functions and shall have had experience in this area. ~~He or she shall receive a salary that is competitive with other private and public mental hospital administrators.~~

(c)A clinical director for a state hospital shall be a physician who has passed, or shall pass, an examination for a license to practice medicine in California and shall be a qualified specialist in a branch of medicine that includes diseases affecting the brain and nervous system. The clinical director for a state hospital shall be well qualified by training or experience to have proven skills in mental hospital program administration.
~~(d)~~

(c) The hospital director shall be ~~either the hospital administrator or the clinical director. He or she shall be~~ selected based on ~~his or her~~ their overall knowledge of the hospital, its programs, and its relationship to its community, and on ~~his or her~~ their demonstrated abilities to administer a large facility.

~~(e)~~

(d) The standards for the professional qualifications of a program director shall be established by the Director of State Hospitals for each patient program. The ~~director~~ Director of State Hospitals shall not adopt regulations that prohibit a licensed psychiatrist, psychologist, psychiatric technician, or clinical social worker from employment in a patient program in any professional, administrative, or technical ~~position; provided, however, that~~ position. However, the program director of a medical-surgical unit shall be a licensed physician.

~~(f)~~

(e) If the program director is not a physician, a physician shall be available to assume responsibility for all those acts of diagnosis, treatment, or prescribing or ordering of drugs that may only be performed by a licensed physician.

SEC. 45.

Section 4309 of the Welfare and Institutions Code is amended to read:

4309.

The hospital director is responsible for the overall management of the hospital. In ~~his absence~~ the hospital director’s absence, one of the other hospital ~~officers~~ officers, or in the absence of ~~both officers~~ the other hospital officers, a program ~~director~~ director, or other hospital representative shall be designated to perform ~~his~~ the hospital director’s duties and assume ~~his~~ the hospital director’s responsibilities.

SEC. 46.

Section 4314 of the Welfare and Institutions Code is amended to read:

4314.

(a) The Director of State Hospitals may set aside and designate any space on the grounds of any of the institutions under the jurisdiction of the department that is not needed for other authorized purposes, to enable the institution to establish and maintain therein a store or canteen for the sale to or for the benefit of patients of the institution of candies, ~~cigarettes,~~ sundries, and other articles. The stores shall be conducted subject to the rules and regulations of the department and the rental, utility, and service charges shall be fixed as will reimburse the institutions for the cost thereof. The stores when conducted under the direction of a hospital administrator shall be operated on a nonprofit basis but any profits derived shall be deposited in the benefit fund of each institution as set forth in Section 4125.

(b) Before any store is authorized or established, the Director of State Hospitals shall first determine that the facilities are not being furnished adequately by private enterprise in the community where it is proposed to locate the store, and may hold public hearings or cause surveys to be made, to determine the same.

(c) The Director of State Hospitals may rent space to private individuals, for the maintenance of a store or canteen at any of these institutions upon any terms and subject to any regulations that are approved by the Department of General Services, in accordance with the provisions of Section 13109 of the Government Code. The terms imposed shall provide that the rental, utility, and service charges to be paid shall be fixed so as to reimburse the institution for the cost thereof and any additional charges required to be paid shall be deposited in the benefit fund of the institution as set forth in Section 4125.

SEC. 47.

Section 4315 of the Welfare and Institutions Code is repealed.

4315.
Wherever the term “superintendent”, “medical superintendent”, or “superintendent or medical director” appears, the term shall be deemed to mean clinical director, except in Sections 4110, 4126, 4127, 4129, 7281, and 7289, where the term shall be deemed to mean hospital administrator.
~~Wherever the term “medical director” appears, the term shall be deemed to mean clinical director.~~

SEC. 48.

Section 14007.8 of the Welfare and Institutions Code is amended to read:

14007.8.

(a) (1) After the director determines, and communicates that determination in writing to the Department of Finance, that systems have been programmed for implementation of this section, but no sooner than May 1, 2016, an individual who is under 19 years of age and who does not have satisfactory immigration status or is unable to establish satisfactory immigration status as required by Section 14011.2 shall be eligible for the full scope of Medi-Cal benefits, if they are otherwise eligible for benefits under this chapter.

(2) (A) An individual under 19 years of age enrolled in Medi-Cal pursuant to subdivision (d) of Section 14007.5 at the time the director makes the determination described in paragraph (1) shall be enrolled in the full scope of Medi-Cal benefits, if otherwise eligible, pursuant to an eligibility and enrollment plan. This plan shall include outreach strategies developed by the department in consultation with interested stakeholders, including, but not limited to, counties, health care service plans, consumer advocates, and the Legislature. An individual subject to this subparagraph shall not be required to file a new application for Medi-Cal.

(B) The effective date of enrollment into Medi-Cal for an individual described in subparagraph (A) shall be on the same day on which the systems are operational to begin processing new applications pursuant to the director’s determination described in paragraph (1).

(C) Beginning January 31, 2016, and until the director makes the determination described in paragraph (1), the department shall provide monthly updates to the appropriate policy and fiscal committees of the Legislature on the status of the implementation of this section.

(b) After the director determines, and communicates that determination in writing to the Department of Finance, that systems have been programmed for implementation of this subdivision, but no sooner than July 1, 2019, an individual who is 19 to 25 years of age, inclusive, and who does not have satisfactory immigration status or is unable to establish satisfactory immigration status as required by Section 14011.2 shall be eligible for the full scope of Medi-Cal benefits, if they are otherwise eligible for benefits under this chapter.

(c) If in determining the projected budget condition for the upcoming fiscal year, the Department of Finance projects a positive ending balance in the Special Fund for Economic Uncertainties for the upcoming fiscal year and each of the ensuing three fiscal years that exceeds the cost of providing individuals who are 65 years of age or older, and who do not have satisfactory immigration statuses or are unable to establish satisfactory immigration statuses as required by Section 14011.2 for the full scope of Medi-Cal benefits, if they are otherwise eligible for benefits under this chapter, such benefits to such individuals shall be prioritized for inclusion in the budget for the upcoming fiscal year.
~~(c)~~

(d) To the extent permitted by state and federal law, an individual eligible under this section shall be required to enroll in a Medi-Cal managed care health plan. Enrollment in a Medi-Cal managed care health plan shall not preclude a beneficiary from being enrolled in any other children’s Medi-Cal specialty program that they would otherwise be eligible for.

~~(d)~~

(e) (1) The department shall maximize federal financial participation in implementing this section to the extent allowable, and, for purposes of implementing this section, the department shall claim federal financial participation to the extent that the department determines it is available.

(2) To the extent that federal financial participation is not available, the department shall implement this section using state funds appropriated for this purpose.

~~(e)~~

(f) This section shall be implemented only to the extent it is in compliance with Section 1621(d) of Title 8 of the United States Code.

~~(f)~~

(g) (1) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department, without taking any further regulatory action, shall implement, interpret, or make specific this section by means of all-county letters, plan letters, plan or provider bulletins, or similar instructions until the time any necessary regulations are adopted. Thereafter, the department shall adopt regulations in accordance with the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

(2) Commencing six months after the effective date of this section, and notwithstanding Section 10231.5 of the Government Code, the department shall provide a status report to the Legislature on a semiannual basis, in compliance with Section 9795 of the Government Code, until regulations have been adopted.

~~(g)~~

(h) In implementing this section, the department may contract, as necessary, on a bid or nonbid basis. This subdivision establishes an accelerated process for issuing contracts pursuant to this section. Those contracts, and any other contracts entered into pursuant to this subdivision, may be on a noncompetitive bid basis and shall be exempt from the following:

(1) Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code and any policies, procedures, or regulations authorized by that part.

(2) Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code.

(3) Review or approval of contracts by the Department of General Services.

SEC. 49.

Section 14011.10 of the Welfare and Institutions Code is amended to read:

14011.10.

(a) Except as provided in Sections 14053.7 and 14053.8, benefits provided under this chapter to an individual who is an inmate of a public institution shall be suspended in accordance with Section 1396d(a)(29)(A) of Title 42 of the United States Code as provided in ~~subdivision (c).~~ subdivisions (c) and (d).

(b) ~~County~~ A county welfare ~~departments~~ department shall notify the department within 10 days of receiving information that an individual on Medi-Cal in the county is or will be an inmate of a public institution.

(c) Until October 1, 2020, if an individual is a Medi-Cal beneficiary on the date they become an inmate of a public institution, their benefits under this chapter and under Chapter 8 (commencing with Section 14200) shall be suspended effective the date they become an inmate of a public institution. The suspension shall end on the date they are no longer an inmate of a public institution or one year from the date they become an inmate of a public institution, whichever is sooner.
(d) Commencing October 1, 2020, if an individual is a Medi-Cal beneficiary on the date they become an inmate of a public institution, their benefits under this chapter and under Chapter 8 (commencing with Section 14200) shall be suspended effective the date they become an inmate of a public institution. The suspension shall end according to the following:
~~(c)~~

(1) If For an individual who is ~~a Medi-Cal beneficiary on the date he or she becomes an inmate of a public institution, his or her benefits~~ not defined as a juvenile under ~~this chapter and under Chapter 8 (commencing with~~ Section ~~14200) shall be suspended effective the date he~~ 1396a(nn)(1)(A) or ~~she becomes an inmate~~ 1396a(nn)(1)(B) of ~~a public institution. The~~ Title 42 of the United States Code, the suspension shall end on the date ~~he or she~~ the individual is no longer an inmate of a public institution or one year from the date ~~he or she~~ the individual becomes an inmate of a public institution, whichever is sooner.

(2) For an individual who is defined as a juvenile under Section 1396a(nn)(1)(A) or 1396a(nn)(1)(B) of Title 42 of the United States Code, the suspension shall end in accordance with Section 1396a(a)(84) of Title 42 of the United States Code, or one year from the date the individual becomes an inmate of a public institution, whichever is later.
(e) The department, in consultation with stakeholders, including the County Welfare Directors Association of California and advocates, shall develop and implement a redetermination of eligibility, to the extent required by federal law, pursuant to Section 14005.37, for individuals referenced in paragraph (2) of subdivision (d) whose eligibility is suspended pursuant to this section.
~~(d)~~

(f) This section does not create a state-funded benefit or program. Health care services under this chapter and Chapter 8 (commencing with Section 14200) shall not be available to inmates of public institutions whose Medi-Cal benefits have been suspended under this section.

~~(e)~~

(g) This section shall be implemented only if and to the extent allowed by federal law. This section shall be implemented only if and to the extent that federal financial participation is available and any necessary federal approval of state plan amendments or other federal approvals ~~are~~ have been obtained.

~~(f)If any part of this section is in conflict with or does not comply with federal law, this entire section shall be inoperative.~~
~~(g)~~

(h) This section shall be implemented on January 1, 2010, or the date when all necessary federal approvals are obtained, whichever is later.

~~(h)~~

(i) By January 1, 2010, or the date when all necessary federal approvals are obtained, whichever is later, the department, in consultation with the Chief Probation Officers of California and the County Welfare Directors ~~Association,~~ Association of California, shall establish the protocols and procedures necessary to implement this section, including any needed changes to the protocols and procedures previously established to implement Section 14029.5.

~~(i)~~

(j) The department shall determine whether federal financial participation will be jeopardized by implementing this section and shall implement this section only if and to the extent that federal financial participation is not jeopardized.

~~(j)~~

(k) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department shall implement this section by means of all-county letters or similar instructions without taking regulatory action. Thereafter, the department shall adopt regulations in accordance with the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

SEC. 50.

Section 14021.51 of the Welfare and Institutions Code is amended to read:

14021.51.

(a) For purposes of this ~~chapter, “LAAM” means levoalphacetylmethadol.~~ section, “narcotic treatment program services” includes, but is not limited to, all of the following:

(1) Admission, physical evaluation, and diagnosis.
(2) Drug screening.
(3) Pregnancy tests.
(4) Narcotic replacement therapy dosing.
(5) Any medication approved under Section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355), and all biological products licensed under Section 351 of the Public Health Service Act (42 U.S.C. 262) to treat opioid use disorders.
(6) (A) Intake assessment, treatment planning, and counseling services.
(B) The frequency of counseling, behavioral therapy, or medical psychotherapy, outcomes, and rates shall be addressed through guidance issued by the department pursuant to subdivision (k). For purposes of this paragraph, these services include substance use services to pregnant and postpartum Medi-Cal beneficiaries.

(b) (1) The department shall establish a narcotic replacement therapy dosing fee for ~~methadone and LAAM.~~ methadone.

(2) In addition to the narcotic replacement therapy dosing fee ~~provided for pursuant to~~ specified in paragraph (1), a narcotic treatment ~~programs~~ program shall be reimbursed for the ingredient costs of methadone ~~or LAAM~~ dispensed to a Medi-Cal ~~beneficiaries.~~ beneficiary. These costs may be determined on an average daily dose of ~~methadone or LAAM,~~ methadone, as set forth by the department.

(c) Reimbursement for narcotic ~~replacement therapy dosing and ancillary services provided by narcotic~~ treatment ~~programs~~ program services shall be based on a per capita uniform statewide daily reimbursement rate for each individual patient, as established by the department. The uniform statewide daily reimbursement rate for narcotic ~~replacement therapy dosing and ancillary~~ treatment program services shall be based upon, ~~where~~ if available and appropriate, all of the following:

(1) The outpatient rates for the same or similar services under the fee-for-service Medi-Cal program.

(2) Cost report data.

(3) Other data deemed reliable and relevant by the department.

(4) The rate studies completed pursuant to Section 54 of Chapter 197 of the Statutes of 1996.

(d) The uniform statewide daily reimbursement rate for ancillary services shall not exceed, for individual services or in the aggregate, the outpatient rates for the same or similar services under the fee-for-service Medi-Cal program.

(e) The uniform statewide daily reimbursement rate shall be established after consultation with narcotic treatment program providers and county alcohol and drug program administrators.

(f) Reimbursement for narcotic treatment program services shall be limited to those services specified in state law and any authorized federally approved Medicaid state plan amendments or waivers related to the Drug Medi-Cal program, and shall be provided in accordance with federal ~~regulations~~ and state law governing the licensing and administration of narcotic treatment programs. ~~These services shall include, but are not limited to, all of the following:~~

~~(1)Admission, physical evaluation, and diagnosis.~~

~~(2)Drug screening.~~

~~(3)Pregnancy tests.~~

~~(4)Narcotic replacement therapy dosing.~~

(5)Intake assessment, treatment planning, and counseling services. Frequency of counseling or medical psychotherapy, outcomes, and rates shall be addressed through regulations adopted by the department. For purposes of this paragraph, these services include, but are not limited to, substance abuse services to pregnant and postpartum Medi-Cal beneficiaries.

(g) Reimbursement under this section shall be limited to claims for narcotic treatment program services at the uniform statewide daily reimbursement rate for these services. These rates shall be exempt from the requirements of Section 14021.6.

(h) (1) Reimbursement to a narcotic treatment program ~~providers~~ provider shall be limited to the lower of ~~either~~ the uniform statewide daily reimbursement rate, pursuant to subdivision (c), or the provider’s usual and customary charge to the general public for the same or similar service.

(2) (A) Reimbursement paid by a county to a narcotic treatment program provider for services provided to any person subject to Section 1210.1 or 3063.1 of the Penal Code, and for which the individual client is not liable to pay, ~~does~~ is not ~~constitute~~ a usual and customary charge to the general public for the purposes of this section.

(B) Subparagraph (A) ~~does~~ is not ~~constitute~~ a change in, but is declaratory of, existing law.

(i) No A program shall not be reimbursed for services or medications not rendered to or received by a patient of a narcotic treatment program.

(j) Reimbursement for narcotic treatment program services ~~provided to substance abusers~~ shall be administered by the department and ~~counties~~ any county electing to participate in the program. Utilization and payment for these services shall be subject to federal Medicaid and state utilization and audit requirements.

(k) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department, without taking any further regulatory action, may implement, interpret, or make specific this section, in whole or in part, by means of bulletins or similar instructions, until the time that any necessary regulations are adopted.
(l) The department shall adopt regulations necessary to implement this section by July 1, 2023.
(m) This section shall be implemented to the extent that any necessary federal approval of state plan amendments or other federal approvals, including waivers, are obtained, and federal financial participation is available and not otherwise jeopardized.

SEC. 51.

Section 14042.1 of the Welfare and Institutions Code is amended to read:

14042.1.

(a) No earlier than January 1, 2018, the State Department of Health Care Services shall establish a Medically Tailored Meals Pilot Program to operate for a period of ~~three years,~~ four years from the date the program is established, or until funding is no longer available for the program, whichever date is earlier.

(1) The department shall determine the number of eligible participants and providers in the program and shall use data from the Medi-Cal ~~data~~ program to identify eligible ~~members~~ beneficiaries for participation in the program.

(2) The program shall provide medically tailored meal intervention services to Medi-Cal participants with one or more of the following health conditions: congestive heart failure, cancer, diabetes, chronic obstructive pulmonary disease, or renal disease.

(3) The department may establish additional eligibility requirements based on acuity and other selection criteria. Each participant in the program shall receive a standard ~~intervention~~ intervention, as determined by the department, of up to 21 meals per week for 12 to 24 weeks. ~~All meals~~ The provided meals shall be medically tailored and designed to meet the specific nutritional needs of the participant’s specific illness.

(4) The program shall be conducted in the ~~following counties:~~ Counties of Alameda, Los Angeles, Marin, San Diego, San Francisco, San Mateo, Santa Clara, and Sonoma.

(5) (A) At the conclusion of the program, the department shall use the data from the Medi-Cal ~~data~~ program on the program participants to evaluate what impact, to the extent it can be determined, the program had on hospital readmissions, decreased admissions to ~~long term~~ long-term care facilities, and emergency room utilization.

(B) The department shall send a report containing its evaluation to the Legislature ~~on or before January 1, 2021, or~~ within 12 months after the end of the ~~three-year~~ four-year program.

(C) The legislative report submitted pursuant to subparagraph (B) shall be submitted in compliance with Section 9795 of the Government Code.

(b) For the purposes of this section, “medically tailored meals” means a specifically tailored diet to address the participant’s specific medical condition and associated symptoms.

(c) The department shall develop a methodology for reimbursing contractors, or other ~~entities~~ entities, as applicable, for services or activities provided pursuant to this section based on, and not to exceed, the aggregate amount of funds allocated per year for purposes of the program. The department may use up to 20 percent of the funds allocated per year for the program to support its administration and evaluation.

(d) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of policy letters, all-county letters, plan letters, or other similar instructions, without taking regulatory action.

(e) For purposes of implementing this section, the department may enter into exclusive or nonexclusive contracts, or amend existing contracts, on a bid or negotiated basis. Contracts entered into or amended pursuant to this section shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, and Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and shall be exempt from the review or approval of any division of the Department of General Services.

(f) The department shall seek any federal approvals necessary to implement this section, including any waivers it deems necessary to obtain federal financial participation for the program, and shall claim federal financial participation to the full extent permitted by law. ~~In the event~~ If federal financial participation is ~~not available,~~ unavailable, the department shall implement the program using available state-only funds, subject to annual appropriation by the Legislature.

(g) This section shall remain in effect until the earlier of ~~January 1, 2021,~~ the date the department submits its report containing its evaluation of the program to the Legislature pursuant to subparagraph (B) of paragraph (5) of subdivision (a), or ~~six~~ 12 months ~~following~~ after the end of the program, and as of that date is repealed.

SEC. 52.

Section 14046 of the Welfare and Institutions Code is amended to read:

14046.

The department shall establish and administer the Medi-Cal ~~Electronic Health Records Incentive~~ Promoting Interoperability Program for the purposes of providing federal incentive payments to Medi-Cal providers for the implementation and use of electronic health records systems.

SEC. 53.

Section 14046.1 of the Welfare and Institutions Code is amended to read:

14046.1.

(a) The program shall be administered in accordance with the State Medicaid Health Information Technology Plan, as developed by the department and approved by the federal Centers for Medicare and Medicaid Services. Upon federal approval, the department shall provide copies of the plan to the appropriate fiscal and policy committees of the Legislature.

(b) The State Medicaid Health Information Technology Plan shall address all of the following:

(1) Identify and establish the planning, policies, and procedures required to operationalize the Medi-Cal ~~Electronic Health Record Incentive~~ Promoting Interoperability Program.

(2) Specify the criteria for enrollment, eligibility, and data collection.

(3) Specify timeframes for technology modifications.

(4) Specify the process for provider outreach and department coordination with established regional extension centers in the state, established to provide technical support to providers.

(5) Establish the audit and appeals processes.

(6) Participate in the National Level Registry.

SEC. 54.

Section 14046.8 of the Welfare and Institutions Code is repealed.

14046.8.
This article shall become inoperative on July 1, 2021, and, as of January 1, 2022, is repealed, unless a later enacted statute, that is enacted before January 1, 2022, deletes or extends the dates on which it becomes inoperative and is repealed.

SEC. 55.

Section 14046.8 is added to the Welfare and Institutions Code, to read:

14046.8.
This article shall remain in effect only until January 1, 2024, and as of that date is repealed.

SEC. 56.

Section 14079 of the Welfare and Institutions Code is amended to read:

14079.

(a) The director ~~annually~~ shall periodically review the reimbursement levels for physician and dental services ~~under Medi-Cal,~~ in the Medi-Cal fee-for-service delivery system, and shall ~~revise~~ periodically revise the rates of reimbursement to physicians and dentists to ~~ensure~~ the ~~reasonable access of Medi-Cal beneficiaries~~ extent the director deems necessary to comply with applicable federal Medicaid program requirements, including provisions on reasonable access to physician and dental ~~services.~~ services for Medi-Cal beneficiaries.

~~This annual~~

(b) To the extent consistent with the department’s federally approved access monitoring plan, or any successor methodology for monitoring reasonable access to Medi-Cal covered services, as described in Section 1396a(a)(30)(A) of Title 42 of the United States Code, this periodic review, as it relates to rates for physician services, shall take into account at least the following factors:

~~(a)~~

(1) Annual cost increases for physicians as reflected by the Consumer Price Index.

~~(b)~~

(2) Physician reimbursement levels ~~of medicare, Blue Shield, and other third-party payors.~~ under the Medicare Program.

~~(c)~~

(3) Prevailing customary physician charges within the state and in various geographical areas.

~~(d)Procedures reflected by the current Relative Value Studies (RVS).~~
~~(e)~~

(4) Characteristics of the current population of Medi-Cal beneficiaries and the medical services needed.

SEC. 57.

Section 14105.31 of the Welfare and Institutions Code is amended to read:

14105.31.

For purposes of the Medi-Cal contract drug list, the following definitions shall apply:

(a) “Single-source drug” means a drug that is produced and distributed under an original New Drug Application approved by the federal Food and Drug Administration. This shall include a drug marketed by the innovator manufacturer and any cross-licensed producers or distributors operating under the New Drug Application, and shall also include a biological product, except for vaccines, marketed by the innovator manufacturer and any cross-licensed producers or distributors licensed by the federal Food and Drug Administration pursuant to Section 262 of Title 42 of the United States Code. A drug ceases to be a single-source drug when the same drug in the same dosage form and strength manufactured by another manufacturer is approved by the federal Food and Drug Administration under the provisions for an Abbreviated New Drug Application.

(b) “Best price” means the negotiated price, or the manufacturer’s lowest price available to any foreign or domestic class of trade organization or entity, including, but not limited to, wholesalers, retailers, hospitals, repackagers, providers, or governmental ~~entities within the United States,~~ entities, that contracts with a manufacturer for a specified price for drugs, inclusive of cash discounts, free goods, volume discounts, rebates, and on- or off-invoice discounts or credits, shall be based upon the manufacturer’s commonly used retail package sizes for the drug sold by wholesalers to retail pharmacies.

(c) “Manufacturer” means any person, partnership, corporation, or other institution or entity that is engaged in the production, preparation, propagation, compounding, conversion, or processing of drugs, either directly or indirectly by extraction from substances of natural origin, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis, or in the packaging, repackaging, labeling, relabeling, and distribution of drugs.

(d) “Price escalator” means a mutually agreed-upon price specified in the contract, to cover anticipated cost increases over the life of the contract.

(e) “Medi-Cal pharmacy costs” or “Medi-Cal drug costs” means all reimbursements to pharmacy providers for services or merchandise, including single-source or multiple-source prescription drugs, over-the-counter medications, and medical supplies, or any other costs billed by pharmacy providers under the Medi-Cal program.

(f) “Medicaid rebate” means the rebate payment made by drug manufacturers pursuant to Section 1927 of the federal Social Security Act (42 U.S.C. Sec. 1396r-8).

(g) “State rebate” means the amount negotiated between the manufacturer and the department for reimbursement by the manufacturer, as specified in the contract, in addition to the Medicaid rebate.

(h) “Date of mailing” means the date that is evidenced by the postmark date by the United States Postal Service or other common mail carrier on the envelope.

(i) The amendments made to this section by the act that added this subdivision shall be effective no sooner than January 1, 2021.
(j) This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available.

SEC. 58.

Section 14105.334 is added to the Welfare and Institutions Code, to read:

14105.334.
(a) Notwithstanding any other law, upon approval of the Department of Finance, the department shall seek the necessary federal approvals to establish and administer a drug rebate program to collect rebate payments from drug manufacturers with respect to drugs furnished to selected populations of California residents that are ineligible for full-scope Medi-Cal benefits under this chapter.
(b) The department shall administer the drug rebate program for qualified non-Medi-Cal populations consistent with the applicable requirements and procedures of the federal Medicaid Drug Rebate Program implemented pursuant to Section 14105.33 and Section 1396r-8 of Title 42 of the United States Code.
(c) The department, in consultation with the Department of Finance, shall determine the non-Medi-Cal populations to be included in the drug rebate program administered pursuant to this section based on the level to which the department can demonstrate that their inclusion furthers the goals and objectives of the Medi-Cal program, increases the efficiency and economy of the Medi-Cal program, and sufficiently benefits the Medi-Cal population as a whole.
(d) The department shall seek any federal approvals from the federal Centers for Medicare and Medicaid Services, via submission of State Plan Amendments or other applicable mechanism, it deems necessary to implement this section. This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized.
(e) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of provider bulletins or other similar instructions, without taking regulatory action.
(f) For purposes of implementing this section, the department may enter into exclusive or nonexclusive contracts, or amend existing contracts, on a bid or negotiated basis with manufacturers of single-source and multiple-source drugs. Contracts entered into or amended pursuant to this section shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Section 19130 of the Government Code, Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and the State Administrative Manual, and shall be exempt from the review or approval of any division of the Department of General Services. Contracts entered into or amended pursuant to this section shall be confidential and shall be exempt from disclosure under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code).
(g) Any rebate payments collected from manufacturers pursuant to this section shall be deposited in the Medi-Cal Drug Rebate Fund, created pursuant to Section 14105.36.

SEC. 59.

Section 14105.467 is added to the Welfare and Institutions Code, to read:

14105.467.
(a) The department shall establish, implement, and maintain a supplemental payment pool for nonhospital 340B community clinics, subject to an appropriation by the Legislature.
(b) Beginning January 1, 2021, and any subsequent fiscal year to the extent funds are appropriated by the Legislature for the purpose described in this section, the department shall make available fee-for-service-based supplemental payments from a fixed-amount payment pool to qualifying nonhospital 340B community clinics in accordance with this section and any terms of federal approval obtained pursuant to subdivision (f).
(c) (1) On or before July 15, 2020, the department shall establish a stakeholder process, which shall include representatives of qualifying nonhospital 340B community clinics. Representatives shall be geographically diverse and consist of qualifying nonhospital 340B community clinics with differing pharmacy arrangements, including those that operate in-house pharmacies and those with contract pharmacy arrangements. The stakeholder process shall be utilized to develop and implement the methodology for distribution of supplemental pool payments to qualifying nonhospital 340B community clinics. This shall include the eligibility criteria for receipt of supplemental payments, the aggregate amount of pool funding available in a respective fiscal year, the criteria for apportioning the pool funding among qualifying nonhospital 340B community clinics, and the timing, frequency, and amount of the resultant supplemental payments.
(2) The department shall conduct at least three meetings with stakeholders and shall finalize the methodology for distribution no later than October 1, 2020.
(d) (1) For any fiscal year that the department implements this section, the aggregate amount of supplemental payments available shall not exceed the pool amount established by the department for the respective fiscal year pursuant to subdivision (b).
(2) For any fiscal year that the department implements this section, the supplemental payment amounts received by a qualifying nonhospital 340B community clinic shall not exceed the apportioned amounts of the pool funding attributable to that individual clinic under the methodology developed pursuant to subdivision (c).
(e) To the extent permissible under federal law, supplemental payments received by qualifying nonhospital 340B community clinics pursuant to this section shall be considered separate and apart from the prospective payment system (PPS) reimbursement the clinic receives pursuant to Section 1396a(bb) of Title 42 of the United States Code and shall not be considered during annual reconciliation of the PPS rate.
(f) (1) The department may modify any methodology or other requirement specified in this section to the extent it deems necessary to meet the requirements of federal law or regulations, to obtain or maintain federal approval, or to ensure federal financial participation is available or not otherwise jeopardized.
(2) If the department determines that a modification is necessary pursuant to paragraph (1), the department shall consult with participants of the stakeholder process established pursuant to subdivision (c) to the extent practicable.
(3) If a modification is made, the department shall notify qualifying nonhospital 340B community clinics, the Joint Legislative Budget Committee, and the relevant policy and fiscal committees of the Legislature within 10 business days of that modification.
(g) The department shall implement this section only to the extent that any necessary federal approvals have been obtained, and federal financial participation is available and is not otherwise jeopardized.
(h) Notwithstanding Chapter 3.5 (commencing with section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section, in whole or in part, by means of provider bulletins or other similar instructions, without taking any further regulatory action.
(i) For purposes of this section:
(1) “340B” means the discount drug purchasing program described in Section 256b of Title 42 of the United States Code.
(2) “Qualifying nonhospital 340B community clinic” means a center or clinic that is licensed under subdivision (a) of Section 1204 of the Health and Safety Code, or a clinic operated by a city, county, city and county, or hospital authority that is exempt from licensure under subdivision (b) of Section 1206 of the Health and Safety Code, and that is a 340B covered entity pursuant to Section 256b of Title 42 of the United States Code for the duration of each applicable fiscal year for which the department implements this section.

SEC. 60.

Section 14124.12 is added to the Welfare and Institutions Code, immediately following Section 14124.11, to read:

14124.12.
(a) (1) Notwithstanding any other law, for the duration of the COVID-19 emergency period, the department shall implement any federal Medicaid program waiver or flexibility approved by the federal Centers for Medicare and Medicaid Services related to the COVID-19 public health emergency. This includes, but is not limited to, any waiver or flexibility approved pursuant to Sections 1315, 1320b-5, or 1396n of Title 42 of the United States Code, or the Medi-Cal state plan. Any request for a federal Medicaid program waiver or flexibility shall be subject to Department of Finance approval before the department submits that request to the federal Centers for Medicare and Medicaid Services.
(2) During the COVID-19 emergency period, if there is a conflict between this chapter, Chapter 8 (commencing with Section 14200), Chapter 8.8 (commencing with Section 14600), or Chapter 8.9 (commencing with Section 14700), and any approved federal waiver or flexibility, as described in paragraph (1), the approved federal waiver or flexibility shall control over any conflict in the specified state law.
(b) (1) To the extent that federal financial participation is available, the department, subject to Department of Finance approval, shall exercise its option under Section 1396a(a)(10)(A)(ii)(XXIII) of Title 42 of the United States Code to extend the medical assistance, as described in Section 1396a(a)(10)(A)(ii)(XVIII) of Title 42 of the United States Code, to uninsured individuals, as defined in Section 1396a(ss) of Title 42 of the United States Code, for the duration of the COVID-19 emergency period.
(2) The department, subject to Department of Finance approval, may seek federal approval pursuant to Section 1315 of Title 42 of the United States Code to extend the medical assistance afforded to uninsured individuals pursuant to paragraph (1) to include COVID-19-related treatment services that are otherwise covered for full-scope Medi-Cal beneficiaries, as defined by the department. If federal financial participation is unavailable, the department, subject to Department of Finance approval, may elect to implement this paragraph on a state-only funding basis, and subject to an appropriation by the Legislature.
(c) Notwithstanding any other law, the department shall seek to maximize federal financial participation for Medi-Cal expenditures that it determines to be available for the COVID-19 public health emergency, and shall comply with any federal requirements and conditions for receipt of that federal financial participation. This includes, but is not limited to, the temporary increase in the federal medical assistance percentage made available pursuant to Section 6008 of the federal Families First Coronavirus Response Act (Public Law 116-127).
(d) Due to the impact of the COVID-19 public health emergency on the department’s ongoing administration of the Medi-Cal program, the department may seek any federal approvals it deems necessary for any number of temporary extensions of all or select components of the California Medi-Cal 2020 Demonstration (No. 11-W-00193/9) pursuant to Article 5.5 (commencing with Section 14184), which is scheduled to expire on December 31, 2020. If the department elects to seek any extension, the department shall determine the length of time for the extension sought and whether to seek an extension for the entirety of the demonstration or select components of the demonstration. In implementing this subdivision, the department, to the extent practicable, shall consult with affected stakeholder entities before seeking a temporary extension.
(e) The department, subject to Department of Finance approval, shall seek any federal approvals it deems necessary to implement this section or to maintain sufficient access to covered benefits under the Medi-Cal program during the COVID-19 emergency period. This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized.
(f) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section by means of all-county letters, plan letters, provider bulletins, or other similar instructions without taking any further regulatory action.
(g) For purposes of this section, the following definitions apply:
(1) “COVID-19 emergency period” has the same meaning as “emergency period” as defined in Section 1320b-5(g)(1)(B) of Title 42 of the United States Code, unless otherwise defined in federal law or any federal approval obtained pursuant to this section.
(2) “COVID-19 public health emergency” means the Public Health Emergency declared by the Secretary of the United States Department of Health and Human Services on January 31, 2020, pursuant to Section 247d of Title 42 of the United States Code, and entitled “Determination that a Public Health Emergency Exists Nationwide as the Result of the 2019 Novel Coronavirus,” including any subsequent renewal of that declaration.

SEC. 61.

Section 14124.24 of the Welfare and Institutions Code is amended to read:

14124.24.

(a) For purposes of this ~~section,~~ chapter, “Drug Medi-Cal reimbursable services” means the substance use disorder services described in the California Medicaid State Plan and includes, but is not limited to, all of the following services, administered by the department, and to the extent consistent with state and federal law:

(1) Narcotic treatment program services, as ~~set forth~~ described in subdivision (a) of Section 14021.51.

(2) ~~Day care rehabilitative~~ Intensive outpatient treatment services.

(3) Perinatal residential services for pregnant women and women in the postpartum period.

(4) Naltrexone services.

(5) Outpatient drug-free services.

(6) Other services upon approval of a federal Medicaid state plan amendment or waiver authorizing federal financial participation.

(b) (1) While seeking federal approval for any federal Medicaid state plan amendment or waiver associated with Drug Medi-Cal services, the department shall consult with the counties and stakeholders in the development of the state plan amendment or waiver.

(2) Upon federal approval of a federal Medicaid state plan amendment authorizing federal financial participation in for the following services, and subject to appropriation of funds, “Drug Medi-Cal reimbursable services” shall also include the following services, administered by the department, and to the extent consistent with state and federal law:

(A) Medication-assisted treatment services, including both of the following:
~~(A)Notwithstanding subdivision (a)~~

(i) Any medication approved under Section 505 of ~~Section 14132.90, day care habilitative services, which, for purposes~~ the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355), and all biological products licensed under Section 351 of ~~this paragraph, are outpatient counseling and rehabilitation services provided~~ the Public Health Service Act (42 U.S.C. 262) to ~~persons with substance~~ treat opioid use ~~disorder diagnoses.~~ disorders.

(ii) Counseling services and behavioral therapy.

(B) Case management services, including supportive services to assist ~~persons~~ a person with substance use disorder diagnoses in gaining access to medical, social, educational, and other needed services.

(c) (1) The nonfederal share for Drug Medi-Cal services shall be funded through a county’s Behavioral Health Subaccount of the Support Services Account of the Local Revenue Fund 2011, and any ~~other~~ available county funds eligible under federal law for federal Medicaid reimbursement. The funds contained in each county’s Behavioral Health Subaccount of the Support Services Account of the Local Revenue Fund 2011 shall be considered state funds distributed by the principal state agency for the ~~purposes of~~ receipt of the federal block grant funds for prevention and treatment of substance abuse found at Subchapter XVII of Chapter 6A of Title 42 of the United States Code. Pursuant to applicable federal Medicaid law and ~~regulations~~ regulations, including Section 433.51 of Title 42 of the Code of Federal Regulations, ~~counties~~ a county may claim allowable Medicaid federal financial participation for Drug Medi-Cal services based on the ~~counties certifying~~ county’s certification of their actual total funds expenditures for eligible Drug Medi-Cal services to the department.

(2) (A) If the director determines that a county’s provision of Drug Medi-Cal treatment services are disallowed by the federal government or by state or federal audit or review, the impacted county shall be responsible for repayment of all disallowed federal funds. In addition to any other recovery methods available, including, but not limited to, offset of Medicaid federal financial participation funds owed to the impacted county, the director may offset these amounts in accordance with Section 12419.5 of the Government Code.

(B) A county subject to an action by the director pursuant to subparagraph (A) may challenge that action by requesting a hearing in writing no later than 30 days from receipt of notice of the department’s action. The proceeding shall be conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, and the director ~~has all~~ shall have the powers granted therein. Upon a county’s timely request for hearing, the county’s obligation to make payment as determined by the director shall be stayed pending the county’s exhaustion of administrative remedies provided ~~herein~~ but no longer than ~~will~~ necessary to ensure the department’s compliance with Section 1903(d)(2)(C) of the federal Social Security Act (42 U.S.C. Sec. 1396b).

(d) Drug Medi-Cal services are only reimbursable to a Drug Medi-Cal ~~providers~~ provider with an approved Drug Medi-Cal contract.

(e) ~~Counties~~ A county shall negotiate contracts only with providers certified to provide Drug Medi-Cal services.

(f) The department shall develop methods to ensure timely payment of Drug Medi-Cal claims.

(g) (1) A county or a contracted provider, except for a provider subject to ~~whom~~ the requirements of subdivision ~~(h) applies,~~ (h), shall submit accurate and complete cost reports for the previous fiscal year by November 1, following the end of the fiscal year. The department may settle Drug Medi-Cal reimbursable services, based on the cost report as the final amendment to the approved county Drug Medi-Cal contract.

(2) ~~Amounts~~ Any amount paid for ~~services~~ any service provided to a Drug Medi-Cal ~~beneficiaries~~ beneficiary shall be audited by the department in the manner and form described in Section 14170.

(3) Administrative appeals to review grievances or complaints arising from the findings of an audit or examination made pursuant to this section shall be subject to Section 14171.

(h) ~~Certified~~ A certified narcotic treatment program ~~providers~~ provider that ~~are~~ is exclusively billing the state or the county for services rendered to persons subject to Section 1210.1 or 3063.1 of the Penal Code or Section 14021.52 ~~of this code~~ shall submit accurate and complete performance reports for the previous state fiscal year by November 1 following the end of that fiscal year. A That provider ~~to which this subdivision applies~~ shall estimate its budgets using the uniform state daily reimbursement rate. The format and content of the performance reports shall be mutually agreed to by the department, the County Behavioral Health Directors Association of California, and representatives of the treatment ~~providers.~~ provider.

(i) ~~Contracts~~ Any contract entered into pursuant to this section shall be exempt from the requirements of Chapter 1 (commencing with Section 10100) and Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of the Public Contract Code.

(j) Annually, the department shall publish procedures for contracting for Drug Medi-Cal services with certified providers and for claiming payments, including procedures and specifications for electronic data submission for services rendered.

(k) If the department commences a preliminary criminal investigation of a certified provider, the department shall promptly notify each county that currently contracts with the provider for Drug Medi-Cal services that a preliminary criminal investigation has commenced. If the department or concludes a preliminary criminal investigation of a certified provider, the department shall promptly notify each county that currently contracts with the provider for Drug Medi-Cal services that a preliminary criminal investigation has commenced or concluded.

(1) Notice of the commencement and conclusion of a preliminary criminal investigation ~~pursuant to this section~~ shall be made to the county behavioral health director or ~~his or her~~ their equivalent.

(2) Communication between the department and a county specific to the commencement or conclusion of a preliminary criminal investigation ~~pursuant to this section~~ shall be ~~deemed~~ confidential and shall not be subject to any disclosure request, including, but not limited to, the Information Practices Act of 1977 (Chapter 1 (commencing with Section 1798) of Title 1.8 of Part 4 of Division 3 of the Civil Code), the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code), requests pursuant to a subpoena, or for any other public purpose, including, but not limited to, court testimony.

(3) Information shared by the department with a county ~~regarding~~ on a preliminary criminal investigation shall be maintained in a manner to ensure protection of the confidentiality of the criminal investigation.

(4) The information provided to a county pursuant to this section shall only include the provider name, national provider identifier ~~(NPI)~~ number, address, and the notice that an investigation has commenced or concluded.

(5) A county shall not take any adverse action against a provider based solely upon the preliminary criminal investigation information disclosed to the ~~county pursuant to this section.~~ county.

(6) In the event of a preliminary criminal investigation of a county owned or operated program, the department has the ~~option to,~~ option, but is not ~~required to,~~ required, to notify the county ~~pursuant to this section~~ when the department commences or concludes a preliminary criminal investigation.

(7) This section ~~shall~~ does not limit the voluntary or otherwise legally mandated or contractually mandated sharing of information between the department and a county of information ~~regarding audits and investigations~~ on an audit or investigation of a Drug Medi-Cal ~~providers.~~ provider.

(8) “Commenced” means the time at which a complaint or allegation is assigned to an investigator for a field investigation.

(9) “Preliminary criminal investigation” means an investigation to gather information to determine if criminal law or statutes have been violated.

(l) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department, without taking any further regulatory action, may implement, interpret, or make specific this section, in whole or in part, by means of bulletins or similar instructions, until the time that any necessary regulations are adopted.
(m) The department shall adopt regulations necessary to implement this section by July 1, 2023.
(n) This section shall be implemented to the extent that any necessary federal approval of state plan amendments or other federal approvals, including waivers, are obtained, and federal financial participation is available and not otherwise jeopardized.

SEC. 62.

Section 14133.22 of the Welfare and Institutions Code is amended to read:

14133.22.

(a) Prescribed drugs shall be limited to no more than six per month, unless prior authorization is obtained.

(b) The limit in subdivision (a) shall not apply to patients receiving care in a nursing facility.

(d) The department may issue Medi-Cal cards that contain labels for prescribed drugs to implement this section.

(e) In carrying out this section, the department may contract either directly, or through the fiscal intermediary, for pharmacy consultant staff necessary to accomplish the treatment authorization request reviews.

(f) This section shall become inoperative on January 1, 2021, and shall be repealed on July 1, 2021, unless a later enacted statute, enacted before that date, deletes or extends that date.

SEC. 63.

Section 14134 of the Welfare and Institutions Code is amended to read:

14134.

(a) Except for any ~~prescription, refill,~~ visit, service, device, or item for which the program’s payment is ten dollars ($10) or less, in which case no copayment shall be required, a recipient of services under this chapter shall be required to make copayments not to exceed the maximum permitted under federal regulations or federal waivers, as follows:

(1) Copayment of five dollars ($5) shall be made for nonemergency services received in an emergency department or emergency room when the services do not result in the treatment of an emergency medical condition or inpatient admittance. For the purposes of this section, “nonemergency services” means services not required to, as appropriate, medically screen, examine, evaluate, or stabilize an emergency medical condition that manifests itself by acute symptoms of sufficient severity, including severe pain, so that the absence of immediate medical attention could reasonably be expected to result in any of the following:

(A) Placing the individual’s health, or, with respect to a pregnant ~~woman,~~ individual, the health of the ~~woman or her~~ pregnant individual or pregnant individual’s unborn child, in serious jeopardy.

(B) Serious impairment to bodily functions.

~~(2)Copayment of one dollar ($1) shall be made for each drug prescription or refill.~~
~~(3)~~

(2) Copayment of one dollar ($1) shall be made for each visit for services under subdivisions (a) and (h) of Section 14132.

~~(4)~~

(3) The copayment amounts set forth in paragraphs ~~(1), (2), and (3)~~ (1) and (2) may be collected and retained, or waived by the provider.

~~(5)~~

(4) The department shall not reduce the reimbursement otherwise due to providers as a result of the copayment. The copayment amounts shall be in addition to any reimbursement otherwise due to the provider for services rendered under this program.

~~(6)~~

(5) This section does not apply to emergency services, family planning services, or to any services received by any of the following:

(A) A child in AFDC-Foster Care, as defined in Section 11400.

(B) A person who is an inpatient in a health facility, as defined in Section 1250 of the Health and Safety Code.

(D) A woman receiving perinatal care.

~~(7)Paragraph (2) does not apply to a person 65 years of age or over.~~
~~(8)~~

(6) A provider of service shall not deny care or services to an individual solely because of that person’s inability to copay under this section. However, an individual shall remain liable to the provider for any copayment amount owed.

~~(9)~~

(7) This section shall not apply to preventive services that are assigned a grade of A or B by the United States Preventive Services Task Force provided by a physician or other licensed practitioner of the healing arts, or any approved adult vaccines and their administration recommended by the Advisory Committee on Immunization Practices. Pursuant to Section 1905(b) of the federal Social Security Act (42 U.S.C. Sec. 1396d(b)), these services shall be provided without any cost sharing by the beneficiary in order for the state to receive an increased federal medical assistance percentage for these services.

(b) The department shall seek any federal waivers necessary to implement this section. The provisions for which appropriate federal waivers cannot be obtained shall not be implemented, but provisions for which waivers are either obtained or found to be unnecessary shall be unaffected by the inability to obtain federal waivers for the other provisions.

(c) The director shall adopt regulations necessary to implement this section as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code. The adoption of the regulations shall be deemed to be an emergency and necessary for the immediate preservation of the public peace, health and safety, or general welfare. The director shall transmit these emergency regulations directly to the Secretary of State for filing and the regulations shall become effective immediately upon filing. Upon completion of the formal regulation adoption process and prior to the expiration of the 120 day duration period of emergency regulations, the director shall transmit directly to the Secretary of State for filing the adopted regulations, the rulemaking file, and the certification of compliance as required by subdivision (e) of Section 11346.1 of the Government Code.

(d) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code and subdivision (c), the department may implement, interpret, or make specific the amendments made to this section by the act that added this subdivision, in whole or in part, by means of policy letter, provider bulletin, or other similar instruction, without taking regulatory action.
(e) The amendments made to this section by the act that added this subdivision shall be effective no sooner than January 1, 2021.
(f) This section shall be implemented only to the extent any necessary federal approvals are obtained and federal financial participation is available.

SEC. 64.

Section 14188 of the Welfare and Institutions Code is amended to read:

14188.

(a) The Legislature finds and declares both of the following:

(1) Value-based payment (VBP) strategies offer financial incentives to health care providers that improve their performance on predetermined measures or meet specified targets that focus on quality and efficiency of care.

(2) Funding pursuant to the California Healthcare, Research and Prevention Tobacco Tax Act of 2016, or Proposition 56, which was approved by voters at the November 8, 2016, statewide general election, is intended, in part, to supplement payments to Medi-Cal providers to ensure quality care in the Medi-Cal program.

(b) In accordance with Proposition 56 and subject to an appropriation by the Legislature, Proposition 56 funding may be used, pursuant to Section 14188.2, for directed payment programs or incentive arrangements in Medi-Cal managed care, including VBPs required of Medi-Cal managed care plans as designated by the department and as described in this article. The purpose of the VBPs shall be to help improve care for some of the most vulnerable or at-risk populations in the Medi-Cal managed care delivery system.

(c) Effective no earlier than July 1, 2019, ~~and for a period no shorter than three fiscal years,~~ the department shall implement the VBP programs described in Section 14188.1, only to the extent that federal financial participation is available and that any necessary federal approvals have been obtained. The department shall develop the structure and parameters of the VBP programs, including designation of those Medi-Cal managed care plans that are required to participate in VBP programs. The department may modify the VBP programs to the extent it deems necessary to obtain or maintain federal approval, if needed to target spending in a manner that furthers the purpose of the programs, or based on evaluation of the programs.

(d) (1) The department shall require the designated Medi-Cal managed care plans to make VBPs to network providers that meet the requirements of the VBP programs implemented pursuant to Section 14188.1, in the amounts, form, and manner as directed by the department.

(2) The department shall not require a county mental health plan contracted with the department pursuant to Chapter 8.9 (commencing with Section 14700), or a county Drug Medi-Cal organized delivery system authorized in the California Medi-Cal 2020 Demonstration pursuant to Article 5.5 (commencing with Section 14184) or a successor demonstration or waiver as applicable, to participate in any VBP program described in Section 14188.1.

(3) VBPs made pursuant to this article shall be in addition to any other payments made by the designated Medi-Cal managed care plans to applicable network providers for services or other performance-based incentives.

(e) For purposes of this article, “VBP” means value-based payment.

SEC. 65.

Section 14188.1 of the Welfare and Institutions Code is amended to read:

14188.1.

Subject to Section 14188, the department shall develop all of the following VBP programs:

(a) A VBP program that is aimed at improving behavioral health integration in Medi-Cal managed care.

(1) Designated Medi-Cal managed care plans shall make incentive payments to qualified network providers that adopt a team-based care approach for individuals with serious mental health conditions or other chronic health conditions.

(2) Qualified network providers may be eligible for different levels of incentive payments, depending on the level of integration, using either a coordination or collocation approach. The qualified network providers may be eligible for partial incentive payments for meeting above-minimum standards.

(3) The requirements for receiving an incentive payment and the methodology for determining the value of the payment shall be determined by the department, in accordance with this article.

(b) A VBP program that is aimed at improving prenatal and postpartum care in Medi-Cal managed care.

(1) Designated Medi-Cal managed care plans shall make incentive payments to qualified network primary care or appropriate specialist providers that meet achievement levels on selected prenatal and postpartum care measures, as determined by the department.

(2) Qualified network primary care or appropriate specialist providers may be eligible for maximum incentive payments if they meet the designated high-performance standards, and partial incentive payments for meeting above-minimum standards.

(3) The requirements for receiving an incentive payment and the methodology for determining the value of the payment shall be determined by the department, in accordance with this article.

(1) Designated Medi-Cal managed care plans shall make incentive payments to qualified network providers that meet achievement levels on selected chronic disease care measures, as determined by the department. The measures shall be in chronic disease care areas, including, but not limited to, diabetes care and control of hypertension, using measures currently recognized for those areas in the Healthcare Effectiveness Data and Information Set (HEDIS) or other nationally recognized measures that the department deems appropriate.

(2) Qualified network providers may be eligible for maximum incentive payments if they meet the designated high-performance standards, and partial incentive payments for meeting above-minimum standards.

(3) The requirements for receiving an incentive payment and the methodology for determining the value of the payment shall be determined by the department, in accordance with this article.

(d) A VBP program that is aimed at improving quality and outcomes for children in Medi-Cal managed care.

(1) Designated Medi-Cal managed care plans shall make incentive payments to qualified network providers that meet achievement levels on selected childhood health care quality measures, as determined by the department. The measures shall be developed using measures currently recognized for those areas in HEDIS or other nationally recognized measures that the department deems appropriate.

(3) The requirements for receiving an incentive payment and the methodology for determining the value of the payment shall be determined by the department, in accordance with this article.

(e) (1) Notwithstanding any other law, this section shall become inoperative on July 1, 2021 pursuant to the suspension described in subdivision (a) of Section 14188.4 unless otherwise provided by Section 14188.4.
(2) To the extent applicable, the department shall withdraw any request for federal approval it submitted to implement this article as it read prior to the changes made to this article by the act that added this subdivision.

SEC. 66.

Section 14188.4 of the Welfare and Institutions Code is repealed.

14188.4.
Value-based payments pursuant to this article shall be suspended on December 31, 2021. If the estimates of General Fund revenues and expenditures determined pursuant to Section 12.5 of Article IV of the California Constitution that accompany the May Revision required to be released by May 14, 2021, pursuant to Section 13308 of the Government Code, contain projected annual General Fund revenues that exceed projected annual General Fund expenditures in the 2021–22 fiscal year and the 2022–23 fiscal year by the sum total of General Fund revenues appropriated for all programs suspended pursuant to the Budget Act of 2019 and all related trailer bill legislation implementing the provisions of the Budget Act of 2019, then the suspension shall not take effect. It is the intent of the Legislature to consider alternative solutions to restore this program, should the suspension take effect.

SEC. 67.

Section 14188.4 is added to the Welfare and Institutions Code, to read:

14188.4.
(a) Notwithstanding any other law, the authority for the State Department of Health Care Services to make value-based payments pursuant to this article shall be suspended for payments associated with service periods on or after July 1, 2021, unless the conditions in either subdivision (b) or (d) apply.
(b) The suspension provided for in subdivision (a) shall not take effect if the estimates of General Fund revenues and expenditures for the 2021–22 and 2022–23 fiscal years, as determined pursuant to Section 12.5 of Article IV of the California Constitution that accompany the May Revision required to be released by May 14, 2021, pursuant to Section 13308 of the Government Code, contain estimated annual General Fund revenues that exceed estimated annual General Fund expenditures for the 2021–22 and 2022–23 fiscal years, by an amount equal to or greater than the sum total of all General Fund appropriations for all programs subject to suspension pursuant to this act and all bills providing for appropriations related to this act.
(c) It is the intent of the Legislature to consider alternative solutions to restore this program if the suspension takes effect.
(d) (1) The suspensions pursuant to subdivision (a) shall be implemented only to the extent that the State Department of Health Care Services obtains any necessary federal approvals, determines that federal financial participation for the Medi-Cal program is not otherwise jeopardized as a result of the suspensions, and the necessary system changes have been completed.
(2) In the event federal approval is not available for any such suspension, or if any such suspensions are held to be invalid or unconstitutional by a decision of a court of competent jurisdiction, the department shall implement the remaining suspensions for which any necessary federal approvals are obtained.

SEC. 68.

Section 14301.11 is added to the Welfare and Institutions Code, immediately following Section 14301.1, to read:

14301.11.
(a) Notwithstanding any law, and subject to subdivisions (e) and (f), in order to account for the impacts of the COVID-19 public health emergency on Medi-Cal managed care capitation rates, the department shall develop and pay capitation rates and capitation increments under any Medi-Cal managed care plan contract pursuant to this section.
(b) In consultation with affected Medi-Cal managed care plans, the department shall develop and implement a risk corridor that is symmetrical to risk and profit to limit the financial risk of either significant capitation rate overpayments or underpayments, pursuant to both of the following:
(1) The risk corridor shall apply to those capitation increments, services and populations, as determined by the department.
(2) The risk corridor shall apply from July 1, 2019, to December 31, 2020, inclusive. The department may continue to apply the risk corridor for rating periods starting on or after January 1, 2021, if the department determines that the continuation of the risk corridor is actuarially appropriate and necessary to account for the impacts of the COVID-19 public health emergency.
(c) To the extent the department determines appropriate, the department shall reduce applicable capitation rate increments by up to 1.5 percent pursuant to subsection (c)(3) of Section 438.7 of Title 42 of the Code of Federal Regulations for capitation rates associated with the July 1, 2019, to December 31, 2020 rating period. The department may apply this reduction to rating periods starting on or after January 1, 2021, if the department determines that the continued reduction is actuarially appropriate and necessary to account for the impacts of the COVID-19 public health emergency.
(d) The department shall evaluate the impact of the COVID-19 public health emergency on capitation rates it develops and pays under Medi-Cal managed care plan contracts, and shall make any adjustments it determines are necessary to ensure capitation rates are actuarially appropriate.
(e) (1) This section shall be implemented only to the extent that any necessary federal approvals are obtained and federal financial participation is available and is not otherwise jeopardized.
(2) The department shall seek any federal approvals it deems necessary to implement the adjustments described in this section, subject to subdivision (f). If federal approval is unavailable with respect to one or more of the adjustments described in this section, or if one or more of the adjustments is held to be invalid or unconstitutional by a decision of a court of competent jurisdiction, the department shall implement the remaining adjustments for which any necessary federal approvals are obtained.
(f) The department, in consultation with the Department of Finance, may modify the requirements of this section, or modify any application of this section with respect to certain capitation rate increments, certain Medi-Cal managed care enrollee categories and subcategories of aid, or certain categories or subcategories of medical assistance provided under a Medi-Cal managed care plan contract, if the department determines necessary to meet federal requirements, to obtain or maintain federal approval, or to maximize federal financial participation.
(g) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section by means of all-county letters, plan letters, provider bulletins, or other similar instructions, without taking any further regulatory action.
(h) For purposes of this section, the following definitions apply:
(1) “COVID-19 public health emergency” means the Public Health Emergency declared by the federal Secretary of Health and Human Services on January 31, 2020 pursuant to Section 247d of Title 42 of the United States Code (entitled “Determination that a Public Health Emergency Exists Nationwide as the Result of the 2019 Novel Coronavirus”), and any subsequent renewal of such declaration.
(2) “Medi-Cal managed care plan” means any individual, organization, or entity that enters into a comprehensive risk contract with the department to provide covered full-scope health care services to enrolled Medi-Cal beneficiaries pursuant to Chapter 7 (commencing with Section 14000) or this chapter.

SEC. 69.
(a) Notwithstanding any other law, the authority for the State Department of Health Care Services to make supplemental payments or rate increases pursuant to Section 30130.55 of the Revenue and Taxation Code for the below described service categories shall be suspended for such payments associated with service periods on or after July 1, 2021, unless the conditions in either subdivision (b) or (d) apply:
(1) Physician Services.
(2) Dental Services.
(3) Intermediate Care Facilities for the Developmentally Disabled.
(4) Facilities providing continuous skilled nursing care to developmentally disabled individuals pursuant to the pilot project established by Section 14132.20 of the Welfare and Institutions Code.
(5) HIV/AIDS waiver providers.
(6) Home health providers for children and adults in the Medi-Cal fee-for-service system or through home and community-based service waivers.
(7) Pediatric day health care facilities in the Medi-Cal fee-for-service system.
(8) Trauma screenings for children and adults.
(9) Developmental screenings for children.
(10) Provider training for trauma screenings.
(11) Stand-alone Pediatric Subacute Facilities.
(12) Community-Based Adult Services.
(13) Nonemergency medical transportation.
(b) The suspension provided for in subdivision (a) shall not take effect if the estimates of General Fund revenues and expenditures for the 2021–22 and 2022–23 fiscal years, as determined pursuant to Section 12.5 of Article IV of the California Constitution that accompany the May Revision required to be released by May 14, 2021, pursuant to Section 13308 of the Government Code, contain estimated annual General Fund revenues that exceed estimated annual General Fund expenditures for the 2021–22 and 2022–23 fiscal years, by an amount equal to or greater than the sum total of all General Fund appropriations for all programs subject to suspension pursuant to this act and all bills providing for appropriations related to this act.
(c) It is the intent of the Legislature to consider alternative solutions to restore this program if the suspension takes effect.
(d) (1) The suspensions pursuant to subdivision (a) shall be implemented only to the extent that the State Department of Health Care Services obtains any necessary federal approvals, determines that federal financial participation for the Medi-Cal program is not otherwise jeopardized as a result of the suspensions, and the necessary system changes have been completed.
(2) In the event federal approval is not available for any such suspension, or if any such suspensions are held to be invalid or unconstitutional by a decision of a court of competent jurisdiction, the department shall implement the remaining suspensions for which any necessary federal approvals are obtained.
(e) The Legislature finds and declares that the suspension of payments pursuant to this section is:
(1) Made in accordance with the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 (Article 2.5 (commencing with Section 30130.50) of Chapter 2 of Part 13 of Division 2 of the Revenue and Taxation Code).
(2) Based on criteria developed and periodically updated as part of the annual state budget process, in accordance with subdivision (a) of Section 30130.55 of the Revenue and Taxation Code.
(3) Consistent with the purposes and conditions of expenditures described in subdivision (a) of Section 30130.55 of the Revenue and Taxation Code.

SEC. 70.

Of the balance of the amounts appropriated in Item 4260-101-0001 of Section 2.00 of the Budget Act of 2017 (Chapter 14 of the Statutes of 2017), the sum of one million, four hundred thirty-thousand dollars ($1,430,000) is hereby reappropriated to support the Medically Tailored Meals Pilot Program, as authorized under Section 14042.1 of the Welfare and Institutions Code, and shall be available for encumbrance or expenditure until June 30, 2023.

SEC. 71.
The Legislature finds and declares that Sections 127673, 127673.5, and 127673.81 of the Health and Safety Code, as added by this act, impose a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:
In order to protect confidential and proprietary information submitted for inclusion in the Health Care Payments Data System, it is necessary for that information to remain confidential.

SEC. 72.
The Legislature finds and declares that Section 14105.334 of the Welfare and Institutions Code, as added by this act, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:
In order to facilitate manufacturer participation and deliver affordable prescription drugs to low-income Californians, it is necessary to protect the confidentiality of trade secrets and pricing information.

SEC. 73.
The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 74.
No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution for certain costs that may be incurred by a local agency or school district because, in that regard, 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.
However, if the Commission on State Mandates determines that this act contains other costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

SEC. 75.
This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately.

SECTION 1.
~~The Legislature finds and declares the following:~~
~~(a)The gap between available and needed housing is increasing the cost of living in our state and negatively impacting middle class Californians.~~
~~(b)Addressing the housing cost crisis will require action by the state, local governments, and the private sector to increase housing production and preserve available affordable housing.~~
~~(c)The 2019–20 Budget Act provides approximately $8 billion in funding to address California’s housing and homelessness crisis.~~
(d)A key element of increasing housing production is to ensure that local governments are implementing state law, particularly their planning and zoning obligations. To that end, this act establishes incentives, due process requirements, and penalties. Specifically, this act expands judicial remedies that may be imposed by the court when a city, county, or a city and county is found to be out of substantial compliance with housing element law, is provided by the act more than one year to come into substantial compliance, and continues not following the law.
(e)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.
SEC. 2.Section 30035.7 of the Government Code is amended to read:
30035.7.
(a)Of the amount appropriated in the annual Budget Act or other measure for the program, the department’s Office of State Audits and Evaluations may use up to five hundred thousand dollars ($500,000) to conduct an audit of the program to determine its effectiveness in providing services to ex-offenders.
(b)The department’s Office of State Audits and Evaluations shall conduct an audit of the program. The department shall provide a copy of the audit to the Joint Legislative Budget Committee no later than May 1, 2020. The copy of the audit shall be submitted in compliance with Section 9795.
(c)Cities, counties, cities and counties, and facility operators that receive program funds shall agree, as a condition of receiving program funds, to cooperate fully with the audit conducted pursuant to this section by the department’s Office of State Audits and Evaluations.
SEC. 3.Section 65400 of the Government Code is amended to read:
65400.
~~(a)After the legislative body has adopted all or part of a general plan, the planning agency shall do both of the following:~~
(1)Investigate and make recommendations to the legislative body regarding reasonable and practical means for implementing the general plan or element of the general plan, so that it will serve as an effective guide for orderly growth and development, preservation and conservation of open-space land and natural resources, and the efficient expenditure of public funds relating to the subjects addressed in the general plan.
(2)Provide by April 1 of each year an annual report to the legislative body, the Office of Planning and Research, and the Department of Housing and Community Development that includes all of the following:
~~(A)The status of the plan and progress in its implementation.~~
(B)The progress in meeting its share of regional housing needs determined pursuant to Section 65584 and local efforts to remove governmental constraints to the maintenance, improvement, and development of housing pursuant to paragraph (3) of subdivision (c) of Section 65583.
The housing element portion of the annual report, as required by this paragraph, shall be prepared through the use of standards, forms, and definitions adopted by the Department of Housing and Community Development. The department may review, adopt, amend, and repeal the standards, forms, or definitions, to implement this article. Any standards, forms, or definitions adopted to implement this article shall not be subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2. Before and after adoption of the forms, the housing element portion of the annual report shall include a section that describes the actions taken by the local government towards completion of the programs and status of the local government’s compliance with the deadlines in its housing element. That report shall be considered at an annual public meeting before the legislative body where members of the public shall be allowed to provide oral testimony and written comments.
The report may include the number of units that have been substantially rehabilitated, converted from nonaffordable to affordable by acquisition, and preserved consistent with the standards set forth in paragraph (2) of subdivision (c) of Section 65583.1. The report shall document how the units meet the standards set forth in that subdivision.
~~(C)The number of housing development applications received in the prior year.~~
~~(D)The number of units included in all development applications in the prior year.~~
~~(E)The number of units approved and disapproved in the prior year.~~
~~(F)The degree to which its approved general plan complies with the guidelines developed and adopted pursuant to Section 65040.2 and the date of the last revision to the general plan.~~
(G)A listing of sites rezoned to accommodate that portion of the city’s or county’s share of the regional housing need for each income level that could not be accommodated on sites identified in the inventory required by paragraph (1) of subdivision (c) of Section 65583 and Section 65584.09. The listing of sites shall also include any additional sites that may have been required to be identified by Section 65863.
(H)The number of net new units of housing, including both rental housing and for-sale housing, that have been issued a completed entitlement, a building permit, or a certificate of occupancy, thus far in the housing element cycle, and the income category, by area median income category, that each unit of housing satisfies. That production report shall, for each income category described in this subparagraph, distinguish between the number of rental housing units and the number of for-sale units that satisfy each income category. The production report shall include, for each entitlement, building permit, or certificate of occupancy, a unique site identifier that must include the assessor’s parcel number, but may include street address, or other identifiers.
(I)The number of applications submitted pursuant to subdivision (a) of Section 65913.4, the location and the total number of developments approved pursuant to subdivision (b) of Section 65913.4, the total number of building permits issued pursuant to subdivision (b) of Section 65913.4, the total number of units including both rental housing and for-sale housing by area median income category constructed using the process provided for in subdivision (b) of Section 65913.4.
(J)If the city or county has received funding pursuant to the Local Government Planning Support Grants Program (Chapter 3.1 (commencing with Section 50515) of Part 2 of Division 31 of the Health and Safety Code), the information required pursuant to subdivision (a) of Section 50515.04 of the Health and Safety Code.
~~(K)The Department of Housing and Community Development shall post a report submitted pursuant to this paragraph on its internet website within a reasonable time of receiving the report.~~
(b)If a court finds, upon a motion to that effect, that a city, county, or city and county failed to submit, within 60 days of the deadline established in this section, the housing element portion of the report required pursuant to subparagraph (B) of paragraph (2) of subdivision (a) that substantially complies with the requirements of this section, the court shall issue an order or judgment compelling compliance with this section within 60 days. If the city, county, or city and county fails to comply with the court’s order within 60 days, the plaintiff or petitioner may move for sanctions, and the court may, upon that motion, grant appropriate sanctions. The court shall retain jurisdiction to ensure that its order or judgment is carried out. If the court determines that its order or judgment is not carried out within 60 days, the court may issue further orders as provided by law to ensure that the purposes and policies of this section are fulfilled. This subdivision applies to proceedings initiated on or after the first day of October following the adoption of forms and definitions by the Department of Housing and Community Development pursuant to paragraph (2) of subdivision (a), but no sooner than six months following that adoption.
SEC. 4.Section 65585 of the Government Code is amended to read:
65585.
(a)In the preparation of its housing element, each city and county shall consider the guidelines adopted by the department pursuant to Section 50459 of the Health and Safety Code. Those guidelines shall be advisory to each city or county in the preparation of its housing element.
(b)(1)At least 90 days prior to adoption of its housing element, or at least 60 days prior to the adoption of an amendment to this element, the planning agency shall submit a draft element or draft amendment to the department.
(2)The planning agency staff shall collect and compile the public comments regarding the housing element received by the city, county, or city and county, and provide these comments to each member of the legislative body before it adopts the housing element.
(3)The department shall review the draft and report its written findings to the planning agency within 90 days of its receipt of the draft in the case of an adoption or within 60 days of its receipt in the case of a draft amendment.
(c)In the preparation of its findings, the department may consult with any public agency, group, or person. The department shall receive and consider any written comments from any public agency, group, or person regarding the draft or adopted element or amendment under review.
~~(d)In its written findings, the department shall determine whether the draft element or draft amendment substantially complies with this article.~~
(e)Prior to the adoption of its draft element or draft amendment, the legislative body shall consider the findings made by the department. If the department’s findings are not available within the time limits set by this section, the legislative body may act without them.
~~(f)If the department finds that the draft element or draft amendment does not substantially comply with this article, the legislative body shall take one of the following actions:~~
~~(1)Change the draft element or draft amendment to substantially comply with this article.~~
(2)Adopt the draft element or draft amendment without changes. The legislative body shall include in its resolution of adoption written findings which explain the reasons the legislative body believes that the draft element or draft amendment substantially complies with this article despite the findings of the department.
~~(g)Promptly following the adoption of its element or amendment, the planning agency shall submit a copy to the department.~~
~~(h)The department shall, within 90 days, review adopted housing elements or amendments and report its findings to the planning agency.~~
(i)(1)(A)The department shall review any action or failure to act by the city, county, or city and county that it determines is inconsistent with an adopted housing element or Section 65583, including any failure to implement any program actions included in the housing element pursuant to Section 65583. The department shall issue written findings to the city, county, or city and county as to whether the action or failure to act substantially complies with this article, and provide a reasonable time no longer than 30 days for the city, county, or city and county to respond to the findings before taking any other action authorized by this section, including the action authorized by subparagraph (B).
(B)If the department finds that the action or failure to act by the city, county, or city and county does not substantially comply with this article, and if it has issued findings pursuant to this section that an amendment to the housing element substantially complies with this article, the department may revoke its findings until it determines that the city, county, or city and county has come into compliance with this article.
(2)The department may consult with any local government, public agency, group, or person, and shall receive and consider any written comments from any public agency, group, or person, regarding the action or failure to act by the city, county, or city and county described in paragraph (1), in determining whether the housing element substantially complies with this article.
(j)The department shall notify the city, county, or city and county and may notify the Office of the Attorney General that the city, county, or city and county is in violation of state law if the department finds that the housing element or an amendment to this element, or any action or failure to act described in subdivision (i), does not substantially comply with this article or that any local government has taken an action in violation of the following:
~~(1)Housing Accountability Act (Section 65589.5 of the Government Code).~~
~~(2)Section 65863 of the Government Code.~~
~~(3)Chapter 4.3 (commencing with Section 65915) of Division 1 of Title 7 of the Government Code.~~
~~(4)Section 65008 of the Government Code.~~
(k)Commencing July 1, 2019, prior to the Attorney General bringing any suit for a violation of the provisions identified in subdivision (j) related to housing element compliance and seeking remedies available pursuant to this subdivision, the department shall offer the jurisdiction the opportunity for two meetings in person or via telephone to discuss the violation, and shall provide the jurisdiction written findings regarding the violation. This paragraph does not affect any action filed prior to the effective date of this section. The requirements set forth in this subdivision shall not apply to any suits brought for a violation or violations of paragraphs (1), (3), and (4) of subdivision (j).
(l)In any action or special proceeding brought by the Attorney General relating to housing element compliance pursuant to subdivision (j), the Attorney General shall request, upon a finding of the court that the housing element does not substantially comply with the requirements of this article pursuant to this section, that the court issue an order or judgment directing the jurisdiction to bring its housing element into substantial compliance with the requirements of this article. The court shall retain jurisdiction to ensure that its order or judgment is carried out, and once a court determines that the housing element of the jurisdiction substantially complies with this article, it shall have the same force and effect, for all purposes, as the department’s determination that the housing element substantially complies with this article.
(1)If the jurisdiction has not complied with the order or judgment after twelve months, the court shall conduct a status conference. Following the status conference, upon a determination that the jurisdiction failed to comply with the order or judgment compelling substantial compliance with the requirements of this article, the court shall impose fines on the jurisdiction, which shall be deposited into the Building Homes and Jobs Trust Fund. Any fine levied pursuant to this paragraph shall be in a minimum amount of ten thousand dollars ($10,000) per month, but shall not exceed one hundred thousand dollars ($100,000) per month, except as provided in paragraphs (2) and (3). In the event that the jurisdiction fails to pay fines imposed by the court in full and on time, the court may 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. The intercept of the funds by the Controller for this purpose shall not violate any provision of the California Constitution.
(2)If the jurisdiction has not complied with the order or judgment after three months following the imposition of fees described in paragraph (1), the court shall conduct a status conference. Following the status conference, if the court finds that the fees imposed pursuant to paragraph (1) are insufficient to bring the jurisdiction into compliance with the order or judgment, the court may multiply the fine determined pursuant to paragraph (1) by a factor of three. In the event that the jurisdiction fails to pay fines imposed by the court in full and on time, the court may 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. The intercept of the funds by the Controller for this purpose shall not violate any provision of the California Constitution.
(3)If the jurisdiction has not complied with the order or judgment six months following the imposition of fees described in paragraph (1), the court shall conduct a status conference. Upon a determination that the jurisdiction failed to comply with the order or judgment, the court may impose the following:
(A)If the court finds that the fees imposed pursuant to paragraph (1) and paragraph (2) are insufficient to bring the jurisdiction into compliance with the order or judgement, the court may multiply the fine determined pursuant to paragraph (1) by a factor of six. In the event that the jurisdiction fails to pay fines imposed by the court in full and on time, the court may 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. The intercept of the funds by the Controller for this purpose shall not violate any provision of the California Constitution.
(B)The court may order remedies available pursuant to Section 564 of the Code of Civil Procedure, under which the agent of the court may be appointed with all the powers necessary to bring the jurisdiction’s housing element into substantial compliance pursuant to this article in order to remedy identified deficiencies. The court shall determine whether the housing element of the jurisdiction substantially complies with this article and, once the court makes that determination, it shall have the same force and effect, for all purposes, as the department’s determination that the housing element substantially complies with this article. An agent appointed pursuant to this paragraph shall have expertise in planning in California.
(4)This subdivision shall not limit a court’s discretion to apply any and all remedies in an action or special proceeding filed by a party other than the state for a violation of any law identified in subdivision (j).
(m)In determining the application of the remedies available under subdivision (l), the court shall consider whether there are any mitigating circumstances delaying the jurisdiction from coming into compliance with state housing law. The court may consider whether a city, county, or city and county is making a good faith effort to come into substantial compliance or is facing substantial undue hardships.
~~(n)The Office of the Attorney General may seek all remedies available under law including those set forth in this section.~~
SEC. 5.Section 65589.9 is added to the Government Code, to read:
65589.9.
(a)It is the intent of the Legislature to create incentives for jurisdictions that are compliant with housing element requirements and have enacted prohousing local policies. It is the intent of the Legislature that these incentives be in the form of additional points or other preference in the scoring of competitive housing and infrastructure programs. It is the intent of the Legislature that, in adopting regulations related to prohousing local policy criteria, the department shall create criteria that consider the needs of rural, suburban, and urban jurisdictions and how those criteria may differ in those areas.
(b)For award cycles commenced after July 1, 2021, jurisdictions that have adopted a housing element that has been found by the department to be in substantial compliance with the requirements of this article pursuant to Section 65585, and that have been designated prohousing pursuant to subdivision (c) based upon their adoption of prohousing local policies, shall be awarded additional points or preference in the scoring of program applications for the following programs:
~~(1)The Affordable Housing and Sustainable Communities Program established by Part 1 (commencing with Section 75200) of Division 44 of the Public Resources Code.~~
~~(2)The Transformative Climate Communities Program established by Part 4 (commencing with Section 75240) of Division 44 of the Public Resources Code.~~
~~(3)The Infill Incentive Grant Program of 2007 established by Section 53545.13 of the Health and Safety Code.~~
~~(4)Additional bonus points may be awarded to other state programs when already allowable under state law.~~
(c)The department shall designate jurisdictions as prohousing pursuant to the emergency regulations adopted pursuant to subdivision (d) and report these designations to the Office of Planning and Research, and any other applicable agency or department, annually and upon request.
~~(d)By July 1, 2021, the department, in collaboration with stakeholders, shall adopt emergency regulations to implement this section.~~
~~(e)On or before January 1, 2021, and annually thereafter, the Department of Finance shall publish on its internet website the list of programs included under subdivision (b).~~
~~(f)For purposes of this section, the following definitions shall apply:~~
(1)“Compliant housing element” means an adopted housing element that has been found to be in substantial compliance with the requirements of this article by the department pursuant to Section 65585.
~~(2)“Prohousing local policies” means policies that facilitate the planning, approval, or construction of housing. These policies may include, but are not limited to, the following:~~
~~(A)Local financial incentives for housing, including, but not limited to, establishing a local housing trust fund.~~
~~(B)Reduced parking requirements for sites that are zoned for residential development.~~
~~(C)Adoption of zoning allowing for use by right for residential and mixed-use development.~~
(D)Zoning more sites for residential development or zoning sites at higher densities than is required to accommodate the minimum existing regional housing need allocation for the current housing element cycle.
(E)Adoption of accessory dwelling unit ordinances or other mechanisms that reduce barriers for property owners to create accessory dwelling units beyond the requirements outlined in Section 65852.2, as determined by the department.
~~(F)Reduction of permit processing time.~~
~~(G)Creation of objective development standards.~~
~~(H)Reduction of development impact fees.~~
~~(I)Establishment of a Workforce Housing Opportunity Zone, as defined in Section 65620, or a housing sustainability district, as defined in Section 66200.~~
SEC. 6.Section 65589.11 is added to the Government Code, to read:
65589.11.
(a)The department shall post on its internet website each month a list of jurisdictions that have failed to adopt a housing element that has been found by the department to be in substantial compliance with the requirements of this article pursuant to Section 65585. The department shall, on an annual basis, by July 1, or upon request, provide the most recent version of the list to the Office of Planning and Research and any other applicable agency or department.
(b)If a jurisdiction is included on this list described in subdivision (a), the department shall notify the jurisdiction of its inclusion upon the first occurrence of this inclusion. A copy of all notifications sent to a jurisdiction shall also be submitted to the legislative body of the jurisdiction.
(c)If a jurisdiction is included on the list described in subdivision (a), the department shall offer the jurisdiction the opportunity for 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 with the requirements of this article pursuant to Section 65585, and shall provide the jurisdiction written findings regarding that failure. Meetings previously offered pursuant to subdivision (k) of Section 65585 shall satisfy the requirements of this subdivision.
(d)Within 30 days of a jurisdiction both appearing on the list published pursuant to subdivision (a), and also having adopted a housing element pursuant to paragraph (2) of subdivision (f) of Section 65585, a jurisdiction may request, in writing, that the department review de novo the jurisdiction’s last housing element adopted pursuant to paragraph (2) of subdivision (f) of Section 65585. Within 30 days of receipt of the request, the department shall issue written findings as to whether the housing element has been found by the department to be in substantial compliance with the requirements of this article pursuant to Section 65585. If the department’s written findings state that the jurisdiction’s housing element is not in substantial compliance with the requirements of this article pursuant to Section 65585, then the city, county, or city and county may, within 30 days of receiving those written findings, bring an action to superior court pursuant to Section 1094.5 of the Civil Code of Procedure to challenge the department’s determination. Any action pursuant to this subdivision shall not impact the allocation of funds for any programs identified in subdivision (e).
(e)On or before January 1, 2023, and annually thereafter, the Department of Finance shall publish on its internet website a list of programs, if any, where eligibility for funding is contingent upon a jurisdiction having adopted a housing element that has been found by the department to be in substantial compliance with the requirements of this article pursuant to Section 65585. The list shall not include any program where eligibility for funding is contingent upon a housing element that has been found by the department to be in substantial compliance with the requirements of this article pursuant to Section 65585 on or before the effective date of this section.
~~(f)Subdivisions (c) and (d) of this section shall become operative upon the inclusion of at least one program on the list published pursuant to subdivision (e).~~
~~(g)This section shall not affect any action filed on or before the effective date of this section.~~
SEC. 7.Article 12 (commencing with Section 65660) is added to Chapter 3 of Division 1 of Title 7 of the Government Code, to read:
12.Low Barrier Navigation Centers
65660.
~~For purposes of this article:~~
(a)“Low Barrier Navigation Center” means 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. “Low Barrier” means 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, women, or youth.~~
~~(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.~~
(b)“Use by right” has the meaning defined in subdivision (i) of Section 65583.2. Division 13 (commencing with Section 21000) of the Public Resources Code shall not apply to actions taken by a public agency to lease, convey, or encumber land owned by a public agency, or to facilitate the lease, conveyance, or encumbrance of land owned by a public agency, or to provide financial assistance to, or otherwise approve, a Low Barrier Navigation Center constructed or allowed by this section.
65662.
A Low Barrier Navigation Center development is a use by right in areas zoned for mixed use and nonresidential zones permitting multifamily uses, if it meets the requirements of this article. A local jurisdiction shall permit a Low Barrier Navigation Center development provided that it meets the following requirements:
~~(a)It offers services to connect people to permanent housing through a services plan that identifies services staffing.~~
(b)It is linked to a coordinated entry system, so that staff in the interim facility or staff who colocate in the facility may conduct assessments and provide services to connect people to permanent housing. “Coordinated entry system” means a centralized or coordinated assessment system developed pursuant to Section 576.400(d) or Section 578.7(a)(8), as applicable, of Title 24 of the Code of Federal Regulations, as those sections read on January 1, 2020, and any related requirements, designed to coordinate program participant intake, assessment, and referrals.
~~(c)It complies with Chapter 6.5 (commencing with Section 8255) of Division 8 of the Welfare and Institutions Code.~~
(d)It has a system for entering information regarding client stays, client demographics, client income, and exit destination through the local Homeless Management Information System as defined by Section 578.3 of Title 24 of the Code of Federal Regulations.
65664.
Within 30 days of receipt of an application for a Low Barrier Navigation Center development, the local jurisdiction shall notify a developer whether the developer’s application is complete pursuant to Section 65943. Within 60 days of receipt of a completed application for a Low Barrier Navigation Center development, the local jurisdiction shall act upon its review of the application.
65666.
The Legislature finds and declares that Low Barrier Navigation Center developments are essential tools for alleviating the homelessness crisis in this state and are a matter of statewide concern and not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this article shall apply to all cities, including charter cities.
65668.
~~This article shall remain in effect only until January 1, 2027, and as of that date is repealed.~~
SEC. 8.Section 65913.4 of the Government Code is amended to read:
65913.4.
(a)A development proponent may submit an application for a development that is subject to the streamlined, ministerial approval process provided by subdivision (b) and is not subject to a conditional use permit if the development satisfies all of the following objective planning standards:
~~(1)The development is a multifamily housing development that contains two or more residential units.~~
~~(2)The development is located on a site that satisfies all of the following:~~
(A)A site that is a legal parcel or parcels located in a city if, and only if, the city boundaries include some portion of either an urbanized area or urban cluster, as designated by the United States Census Bureau, or, for unincorporated areas, a legal parcel or parcels wholly within the boundaries of an urbanized area or urban cluster, as designated by the United States Census Bureau.
(B)A site in which at least 75 percent of the perimeter of the site adjoins parcels that are developed with urban uses. For the purposes of this section, parcels that are only separated by a street or highway shall be considered to be adjoined.
(C)A site that is zoned for residential use or residential mixed-use development, or has a general plan designation that allows residential use or a mix of residential and nonresidential uses, with at least two-thirds of the square footage of the development designated for residential use. Additional density, floor area, and units, and any other concession, incentive, or waiver of development standards granted pursuant to the Density Bonus Law in Section 65915 shall be included in the square footage calculation.
(3)(A)The development proponent has committed to record, prior to the issuance of the first building permit, a land use restriction or covenant providing that any lower income housing units required pursuant to subparagraph (B) of paragraph (4) shall remain available at affordable housing costs or rent to persons and families of lower income for no less than the following periods of time:
~~(i)Fifty-five years for units that are rented.~~
~~(ii)Forty-five years for units that are owned.~~
~~(B)The city or county shall require the recording of covenants or restrictions implementing this paragraph for each parcel or unit of real property included in the development.~~
~~(4)The development satisfies both of the following:~~
(A)Is located in a locality that the department has determined is subject to this subparagraph on the basis that the number of units that have been issued building permits is less than the locality’s share of the regional housing needs, by income category, for that reporting period. A locality shall remain eligible under this subparagraph until the department’s determination for the next reporting period.
~~(B)The development is subject to a requirement mandating a minimum percentage of below market rate housing based on one of the following:~~
(i)The locality did not submit its latest production report to the department by the time period required by Section 65400, or that production report reflects that there were fewer units of above moderate-income housing issued building permits than were required for the regional housing needs assessment cycle for that reporting period. In addition, if the project contains more than 10 units of housing, the project seeking approval dedicates a minimum of 10 percent of the total number of units to housing affordable to households making below 80 percent of the area median income. If the locality has adopted a local ordinance that requires that greater than 10 percent of the units be dedicated to housing affordable to households making below 80 percent of the area median income, that local ordinance applies.
(ii)The locality’s latest production report reflects that there were fewer units of housing issued building permits affordable to either very low income or low-income households by income category than were required for the regional housing needs assessment cycle for that reporting period, and the project seeking approval dedicates 50 percent of the total number of units to housing affordable to households making below 80 percent of the area median income, unless the locality has adopted a local ordinance that requires that greater than 50 percent of the units be dedicated to housing affordable to households making below 80 percent of the area median income, in which case that local ordinance applies.
(iii)The locality did not submit its latest production report to the department by the time period required by Section 65400, or if the production report reflects that there were fewer units of housing affordable to both income levels described in clauses (i) and (ii) that were issued building permits than were required for the regional housing needs assessment cycle for that reporting period, the project seeking approval may choose between utilizing clause (i) or (ii).
(5)The development, excluding any additional density or any other concessions, incentives, or waivers of development standards granted pursuant to the Density Bonus Law in Section 65915, is consistent with objective zoning standards, objective subdivision standards, and objective design review standards in effect at the time that the development is submitted to the local government pursuant to this section. For purposes of this paragraph, “objective zoning standards,” “objective subdivision standards,” and “objective design review standards” mean standards that involve no personal or subjective judgment by a public official and are uniformly verifiable by reference to an external and uniform benchmark or criterion available and knowable by both the development applicant or proponent and the public official before submittal. These standards may be embodied in alternative objective land use specifications adopted by a city or county, and may include, but are not limited to, housing overlay zones, specific plans, inclusionary zoning ordinances, and density bonus ordinances, subject to the following:
(A)A development shall be deemed consistent with the objective zoning standards related to housing density, as applicable, if the density proposed is compliant with the maximum density allowed within that land use designation, notwithstanding any specified maximum unit allocation that may result in fewer units of housing being permitted.
(B)In the event that objective zoning, general plan, subdivision, or design review standards are mutually inconsistent, a development shall be deemed consistent with the objective zoning and subdivision standards pursuant to this subdivision if the development is consistent with the standards set forth in the general plan.
~~(C)The amendments to this subdivision made by the act adding this subparagraph do not constitute a change in, but are declaratory of, existing law.~~
~~(6)The development is not located on a site that is any of the following:~~
~~(A)A coastal zone, as defined in Division 20 (commencing with Section 30000) of the Public Resources Code.~~
(B)Either prime farmland or farmland of statewide importance, as defined pursuant to United States Department of Agriculture land inventory and monitoring criteria, as modified for California, and designated on the maps prepared by the Farmland Mapping and Monitoring Program of the Department of Conservation, or land zoned or designated for agricultural protection or preservation by a local ballot measure that was approved by the voters of that jurisdiction.
~~(C)Wetlands, as defined in the United States Fish and Wildlife Service Manual, Part 660 FW 2 (June 21, 1993).~~
(D)Within a very high fire hazard severity zone, as determined by the Department of Forestry and Fire Protection pursuant to Section 51178, or within a high or very high fire hazard severity zone as indicated on maps adopted by the Department of Forestry and Fire Protection pursuant to Section 4202 of the Public Resources Code. This subparagraph does not apply to sites excluded from the specified hazard zones by a local agency, pursuant to subdivision (b) of Section 51179, or sites that have adopted fire hazard mitigation measures pursuant to existing building standards or state fire mitigation measures applicable to the development.
(E)A hazardous waste site that is listed pursuant to Section 65962.5 or a hazardous waste site designated by the Department of Toxic Substances Control pursuant to Section 25356 of the Health and Safety Code, unless the State Department of Public Health, State Water Resources Control Board, or Department of Toxic Substances Control has cleared the site for residential use or residential mixed uses.
(F)Within a delineated earthquake fault zone as determined by the State Geologist in any official maps published by the State Geologist, unless the development complies with applicable seismic protection building code standards adopted by the California Building Standards Commission under the California Building Standards Law (Part 2.5 (commencing with Section 18901) of Division 13 of the Health and Safety Code), and by any local building department under Chapter 12.2 (commencing with Section 8875) of Division 1 of Title 2.
(G)Within a special flood hazard area subject to inundation by the 1 percent annual chance flood (100-year flood) as determined by the Federal Emergency Management Agency in any official maps published by the Federal Emergency Management Agency. If a development proponent is able to satisfy all applicable federal qualifying criteria in order to provide that the site satisfies this subparagraph and is otherwise eligible for streamlined approval under this section, a local government shall not deny the application on the basis that the development proponent did not comply with any additional permit requirement, standard, or action adopted by that local government that is applicable to that site. A development may be located on a site described in this subparagraph if either of the following are met:
~~(i)The site has been subject to a Letter of Map Revision prepared by the Federal Emergency Management Agency and issued to the local jurisdiction.~~
(ii)The site meets Federal Emergency Management Agency requirements necessary to meet minimum flood plain management criteria of the National Flood Insurance Program pursuant to Part 59 (commencing with Section 59.1) and Part 60 (commencing with Section 60.1) of Subchapter B of Chapter I of Title 44 of the Code of Federal Regulations.
(H)Within a regulatory floodway as determined by the Federal Emergency Management Agency in any official maps published by the Federal Emergency Management Agency, unless the development has received a no-rise certification in accordance with Section 60.3(d)(3) of Title 44 of the Code of Federal Regulations. If a development proponent is able to satisfy all applicable federal qualifying criteria in order to provide that the site satisfies this subparagraph and is otherwise eligible for streamlined approval under this section, a local government shall not deny the application on the basis that the development proponent did not comply with any additional permit requirement, standard, or action adopted by that local government that is applicable to that site.
(I)Lands identified for conservation in an adopted natural community conservation plan pursuant to the Natural Community Conservation Planning Act (Chapter 10 (commencing with Section 2800) of Division 3 of the Fish and Game Code), habitat conservation plan pursuant to the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), or other adopted natural resource protection plan.
(J)Habitat for protected species identified as candidate, sensitive, or species of special status by state or federal agencies, fully protected species, or species protected by the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), the California Endangered Species Act (Chapter 1.5 (commencing with Section 2050) of Division 3 of the Fish and Game Code), or the Native Plant Protection Act (Chapter 10 (commencing with Section 1900) of Division 2 of the Fish and Game Code).
~~(K)Lands under conservation easement.~~
~~(7)The development is not located on a site where any of the following apply:~~
~~(A)The development would require the demolition of the following types of housing:~~
~~(i)Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income.~~
~~(ii)Housing that is subject to any form of rent or price control through a public entity’s valid exercise of its police power.~~
~~(iii)Housing that has been occupied by tenants within the past 10 years.~~
~~(B)The site was previously used for housing that was occupied by tenants that was demolished within 10 years before the development proponent submits an application under this section.~~
~~(C)The development would require the demolition of a historic structure that was placed on a national, state, or local historic register.~~
(D)The property contains housing units that are occupied by tenants, and units at the property are, or were, subsequently offered for sale to the general public by the subdivider or subsequent owner of the property.
~~(8)The development proponent has done both of the following, as applicable:~~
~~(A)Certified to the locality that either of the following is true, as applicable:~~
~~(i)The entirety of the development is a public work for purposes of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.~~
(ii)If the development is not in its entirety a public work, that all construction workers employed in the execution of the development will be paid at least the general prevailing rate of per diem wages for the type of work and geographic area, as determined by the Director of Industrial Relations pursuant to Sections 1773 and 1773.9 of the Labor Code, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate. If the development is subject to this subparagraph, then for those portions of the development that are not a public work all of the following shall apply:
~~(I)The development proponent shall ensure that the prevailing wage requirement is included in all contracts for the performance of the work.~~
(II)All contractors and subcontractors shall pay to all construction workers employed in the execution of the work at least the general prevailing rate of per diem wages, except that apprentices registered in programs approved by the Chief of the Division of Apprenticeship Standards may be paid at least the applicable apprentice prevailing rate.
(III)Except as provided in subclause (V), all contractors and subcontractors shall maintain and verify payroll records pursuant to Section 1776 of the Labor Code and make those records available for inspection and copying as provided therein.
(IV)Except as provided in subclause (V), the obligation of the contractors and subcontractors to pay prevailing wages may be enforced by the Labor Commissioner through the issuance of a civil wage and penalty assessment pursuant to Section 1741 of the Labor Code, which may be reviewed pursuant to Section 1742 of the Labor Code, within 18 months after the completion of the development, by an underpaid worker through an administrative complaint or civil action, or by a joint labor-management committee though a civil action under Section 1771.2 of the Labor Code. If a civil wage and penalty assessment is issued, the contractor, subcontractor, and surety on a bond or bonds issued to secure the payment of wages covered by the assessment shall be liable for liquidated damages pursuant to Section 1742.1 of the Labor Code.
(V)Subclauses (III) and (IV) shall not apply if all contractors and subcontractors performing work on the development are subject to a project labor agreement that requires the payment of prevailing wages to all construction workers employed in the execution of the development and provides for enforcement of that obligation through an arbitration procedure. For purposes of this clause, “project labor agreement” has the same meaning as set forth in paragraph (1) of subdivision (b) of Section 2500 of the Public Contract Code.
(VI)Notwithstanding subdivision (c) of Section 1773.1 of the Labor Code, the requirement that employer payments not reduce the obligation to pay the hourly straight time or overtime wages found to be prevailing shall not apply if otherwise provided in a bona fide collective bargaining agreement covering the worker. The requirement to pay at least the general prevailing rate of per diem wages does not preclude use of an alternative workweek schedule adopted pursuant to Section 511 or 514 of the Labor Code.
~~(B)(i)For developments for which any of the following conditions apply, certified that a skilled and trained workforce shall be used to complete the development if the application is approved:~~
(I)On and after January 1, 2018, until December 31, 2021, the development consists of 75 or more units with a residential component that is not 100 percent subsidized affordable housing and will be located within a jurisdiction located in a coastal or bay county with a population of 225,000 or more.
(II)On and after January 1, 2022, until December 31, 2025, the development consists of 50 or more units with a residential component that is not 100 percent subsidized affordable housing and will be located within a jurisdiction located in a coastal or bay county with a population of 225,000 or more.
(III)On and after January 1, 2018, until December 31, 2019, the development consists of 75 or more units with a residential component that is not 100 percent subsidized affordable housing and will be located within a jurisdiction with a population of fewer than 550,000 and that is not located in a coastal or bay county.
(IV)On and after January 1, 2020, until December 31, 2021, the development consists of more than 50 units with a residential component that is not 100 percent subsidized affordable housing and will be located within a jurisdiction with a population of fewer than 550,000 and that is not located in a coastal or bay county.
(V)On and after January 1, 2022, until December 31, 2025, the development consists of more than 25 units with a residential component that is not 100 percent subsidized affordable housing and will be located within a jurisdiction with a population of fewer than 550,000 and that is not located in a coastal or bay county.
(ii)For purposes of this section, “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.
~~(iii)If the development proponent has certified that a skilled and trained workforce will be used to complete the development and the application is approved, the following shall apply:~~
(I)The applicant shall require in all contracts for the performance of work that every contractor and subcontractor at every tier will individually use a skilled and trained workforce to complete the development.
~~(II)Every contractor and subcontractor shall use a skilled and trained workforce to complete the development.~~
(III)Except as provided in subclause (IV), the applicant shall provide to the locality, on a monthly basis while the development or contract is being performed, a report demonstrating compliance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code. A monthly report provided to the locality pursuant to this subclause shall be a public record under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1) and shall be open to public inspection. An applicant that fails to provide a monthly report demonstrating compliance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code shall be subject to a civil penalty of ten thousand dollars ($10,000) per month for each month for which the report has not been provided. Any contractor or subcontractor that fails to use a skilled and trained workforce shall be subject to a civil penalty of two hundred dollars ($200) per day for each worker employed in contravention of the skilled and trained workforce requirement. Penalties may be assessed by the Labor Commissioner within 18 months of completion of the development using the same procedures for issuance of civil wage and penalty assessments pursuant to Section 1741 of the Labor Code, and may be reviewed pursuant to the same procedures in Section 1742 of the Labor Code. Penalties shall be paid to the State Public Works Enforcement Fund.
(IV)Subclause (III) shall not apply if all contractors and subcontractors performing work on the development are subject to a project labor agreement that requires compliance with the skilled and trained workforce requirement and provides for enforcement of that obligation through an arbitration procedure. For purposes of this subparagraph, “project labor agreement” has the same meaning as set forth in paragraph (1) of subdivision (b) of Section 2500 of the Public Contract Code.
(C)Notwithstanding subparagraphs (A) and (B), a development that is subject to approval pursuant to this section is exempt from any requirement to pay prevailing wages or use a skilled and trained workforce if it meets both of the following:
~~(i)The project includes 10 or fewer units.~~
~~(ii)The project is not a public work for purposes of Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.~~
(9)The development did not or does not involve a subdivision of a parcel that is, or, notwithstanding this section, would otherwise be, subject to the Subdivision Map Act (Division 2 (commencing with Section 66410)) or any other applicable law authorizing the subdivision of land, unless the development is consistent with all objective subdivision standards in the local subdivision ordinance, and either of the following apply:
(A)The development has received or will receive financing or funding by means of a low-income housing tax credit and is subject to the requirement that prevailing wages be paid pursuant to subparagraph (A) of paragraph (8).
~~(B)The development is subject to the requirement that prevailing wages be paid, and a skilled and trained workforce used, pursuant to paragraph (8).~~
(10)The development shall not be upon an existing parcel of land or site that is governed under the Mobilehome Residency Law (Chapter 2.5 (commencing with Section 798) of Title 2 of Part 2 of Division 2 of the Civil Code), the Recreational Vehicle Park Occupancy Law (Chapter 2.6 (commencing with Section 799.20) of Title 2 of Part 2 of Division 2 of the Civil Code), the Mobilehome Parks Act (Part 2.1 (commencing with Section 18200) of Division 13 of the Health and Safety Code), or the Special Occupancy Parks Act (Part 2.3 (commencing with Section 18860) of Division 13 of the Health and Safety Code).
(b)(1)If a local government determines that a development submitted pursuant to this section is in conflict with any of the objective planning standards specified in subdivision (a), it shall provide the development proponent written documentation of which standard or standards the development conflicts with, and an explanation for the reason or reasons the development conflicts with that standard or standards, as follows:
~~(A)Within 60 days of submittal of the development to the local government pursuant to this section if the development contains 150 or fewer housing units.~~
~~(B)Within 90 days of submittal of the development to the local government pursuant to this section if the development contains more than 150 housing units.~~
(2)If the local government fails to provide the required documentation pursuant to paragraph (1), the development shall be deemed to satisfy the objective planning standards specified in subdivision (a).
(c)(1)Any design review or public oversight of the development may be conducted by the local government’s planning commission or any equivalent board or commission responsible for review and approval of development projects, or the city council or board of supervisors, as appropriate. That design review or public oversight shall be objective and be strictly focused on assessing compliance with criteria required for streamlined projects, as well as any reasonable objective design standards published and adopted by ordinance or resolution by a local jurisdiction before submission of a development application, and shall be broadly applicable to development within the jurisdiction. That design review or public oversight shall be completed as follows and shall not in any way inhibit, chill, or preclude the ministerial approval provided by this section or its effect, as applicable:
~~(A)Within 90 days of submittal of the development to the local government pursuant to this section if the development contains 150 or fewer housing units.~~
~~(B)Within 180 days of submittal of the development to the local government pursuant to this section if the development contains more than 150 housing units.~~
(2)If the development is consistent with the requirements of subparagraph (A) or (B) of paragraph (9) of subdivision (a) and is consistent with all objective subdivision standards in the local subdivision ordinance, an application for a subdivision pursuant to the Subdivision Map Act (Division 2 (commencing with Section 66410)) shall be exempt from the requirements of the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code) and shall be subject to the public oversight timelines set forth in paragraph (1).
(d)(1)Notwithstanding any other law, a local government, whether or not it has adopted an ordinance governing automobile parking requirements in multifamily developments, shall not impose automobile parking standards for a streamlined development that was approved pursuant to this section in any of the following instances:
~~(A)The development is located within one-half mile of public transit.~~
~~(B)The development is located within an architecturally and historically significant historic district.~~
~~(C)When on-street parking permits are required but not offered to the occupants of the development.~~
~~(D)When there is a car share vehicle located within one block of the development.~~
(2)If the development does not fall within any of the categories described in paragraph (1), the local government shall not impose automobile parking requirements for streamlined developments approved pursuant to this section that exceed one parking space per unit.
(e)(1)If a local government approves a development pursuant to this section, then, notwithstanding any other law, that approval shall not expire if the project includes public investment in housing affordability, beyond tax credits, where 50 percent of the units are affordable to households making below 80 percent of the area median income.
(2)If a local government approves a development pursuant to this section and the project does not include 50 percent of the units affordable to households making below 80 percent of the area median income, that approval shall automatically expire after three years except that a project may receive a one-time, one-year extension if the project proponent can provide documentation that there has been significant progress toward getting the development construction ready, such as filing a building permit application.
(3)If a local government approves a development pursuant to this section, that approval shall remain valid for three years from the date of the final action establishing that approval and shall remain valid thereafter for a project so long as vertical construction of the development has begun and is in progress. Additionally, the development proponent may request, and the local government shall have discretion to grant, an additional one-year extension to the original three-year period. The local government’s action and discretion in determining whether to grant the foregoing extension shall be limited to considerations and process set forth in this section.
(f)A local government shall not adopt any requirement, including, but not limited to, increased fees or inclusionary housing requirements, that applies to a project solely or partially on the basis that the project is eligible to receive ministerial or streamlined approval pursuant to this section.
(g)This section shall not affect a development proponent’s ability to use any alternative streamlined by right permit processing adopted by a local government, including the provisions of subdivision (i) of Section 65583.2.
(h)The California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code) does not apply to actions taken by a state agency or local government to lease, convey, or encumber land owned by the local government or to facilitate the lease, conveyance, or encumbrance of land owned by the local government, or to provide financial assistance to a development that receives streamlined approval pursuant to this section that is to be used for housing for persons and families of very low, low, or moderate income, as defined in Section 50093 of the Health and Safety Code.
~~(i)For purposes of this section, the following terms have the following meanings:~~
~~(1)“Affordable housing cost” has the same meaning as set forth in Section 50052.5 of the Health and Safety Code.~~
~~(2)“Affordable rent” has the same meaning as set forth in Section 50053 of the Health and Safety Code.~~
~~(3)“Department” means the Department of Housing and Community Development.~~
~~(4)“Development proponent” means the developer who submits an application for streamlined approval pursuant to this section.~~
~~(5)“Completed entitlements” means a housing development which has received all the required land use approvals or entitlements necessary for the issuance of a building permit.~~
~~(6)“Locality” or “local government” means a city, including a charter city, a county, including a charter county, or a city and county, including a charter city and county.~~
~~(7)“Production report” means the information reported pursuant to subparagraph (H) of paragraph (2) of subdivision (a) of Section 65400.~~
~~(8)“State agency” includes every state office, officer, department, division, bureau, board, and commission, but does not include the California State University or the University of California.~~
(9)“Subsidized” means units that are price or rent restricted such that the units are permanently affordable to households meeting the definitions of very low and lower income, as defined in Sections 50079.5 and 50105 of the Health and Safety Code.
~~(10)“Reporting period” means either of the following:~~
~~(A)The first half of the regional housing needs assessment cycle.~~
~~(B)The last half of the regional housing needs assessment cycle.~~
~~(11)“Urban uses” means any current or former residential, commercial, public institutional, transit or transportation passenger facility, or retail use, or any combination of those uses.~~
(j)The department may review, adopt, amend, and repeal guidelines to implement uniform standards or criteria that supplement or clarify the terms, references, or standards set forth in this section. Any guidelines or terms adopted pursuant to this subdivision 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.
(k)The determination of whether an application for a development is subject to the streamlined ministerial approval process provided by subdivision (b) is not a “project” as defined in Section 21065 of the Public Resources Code.
(l)It is the policy of the state that this section be interpreted and implemented in a manner to afford the fullest possible weight to the interest of, and the approval and provision of, increased housing supply.
~~(m)This section shall remain in effect only until January 1, 2026, and as of that date is repealed.~~

SEC. 9.Section 50199.8 of the Health and Safety Code is amended to read:
50199.8.
The committee is composed of the Governor, or in the Governor’s absence, the Director of Finance, the Controller, the Treasurer, the Director of Housing and Community Development, and the Executive Director of the California Housing Finance Agency. Two representatives of local government, one representative of the counties appointed by the Senate Rules Committee, and one representative of the cities appointed by the Speaker of the Assembly shall serve as ex officio, nonvoting members. The Treasurer shall be the chairperson of the committee. The members of the committee shall serve without compensation. A majority of voting members shall be empowered to act for the committee. The committee may employ an executive director to carry out its duties under this chapter. The committee may, by resolution, delegate to one or more of its members, its executive director, or any other official or employee of the committee any powers and duties that it may deem proper, including, but not limited to, the power to enter into contracts on behalf of the committee.
SEC. 10.Chapter 6 (commencing with Section 50216) is added to Part 1 of Division 31 of the Health and Safety Code, to read:
6.Homeless Housing, Assistance, and Prevention Program
50216.
~~For purposes of this chapter:~~
~~(a)“Agency” means the Business, Consumer Services, and Housing Agency.~~
~~(b)“Applicant” means a continuum of care, city, or county.~~
(c)“City” means a city or city and county that is legally incorporated to provide local government services to its population. A city can be organized either under the general laws of this state or under a charter adopted by the local voters.
~~(d)“Continuum of care” means the same as defined by the United States Department of Housing and Urban Development at Section 578.3 of Title 24 of the Code of Federal Regulations.~~
(e)“Coordinated Entry System” means a centralized or coordinated process developed pursuant to Section 578.7 of Title 24 of the Code of Federal Regulations, as that section read on January 10, 2019, designed to coordinate homelessness program participant intake, assessment, and provision of referrals. In order to satisfy this subdivision, a centralized or coordinated assessment system shall cover the geographic area, be easily accessed by individuals and families seeking housing or services, be well advertised, and include a comprehensive and standardized assessment tool.
~~(f)“Council” means the Homeless Coordinating and Financing Council created pursuant to Section 8257 of the Welfare and Institutions Code.~~
~~(g)“Emergency shelter” has the same meaning as defined in subdivision (e) of Section 50801.~~
~~(h)“Homeless” has the same meaning as defined in Section 578.3 of Title 24 of the Code of Federal Regulations, as that section read on January 10, 2019.~~
(i)“Homeless Management Information System” means the information system designated by a continuum of care to comply with federal reporting requirements as defined in Section 578.3 of Title 24 of the Code of Federal Regulations. The term “Homeless Management Information System” also includes the use of a comparable database by a victim services provider or legal services provider that is permitted by the federal government under Part 576 of Title 24 of the Code of Federal Regulations.
(j)“Homeless point-in-time count” means the 2019 homeless point-in-time count pursuant to Section 578.3 of Title 24 of the Code of Federal Regulations. A jurisdiction may elect to instead use their 2017 point-in-time count if they can demonstrate that a significant methodology change occurred between the 2017 and 2019 point-in-time counts that was based on an attempt to more closely align the count with HUD best practices and undertaken in consultation with HUD representatives. A jurisdiction shall submit documentation of this to the agency by the date by which HUD’s certification of the 2019 homeless point-in-time count is finalized. The agency shall review and approve or deny a request described in the previous sentence along with a jurisdiction’s application for homeless funding.
(k)“Homeless youth” means an unaccompanied youth between 12 and 24 years of age, inclusive, who is experiencing homelessness, as defined in subsection (2) of Section 725 of the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11434a(2)). “Homeless youth” includes unaccompanied youth who are pregnant or parenting.
~~(l)“Housing First” has the same meaning as in Section 8255 of the Welfare and Institutions Code, including all of the core components listed therein.~~
~~(m)“Jurisdiction” means a city, city that is also a county, county, or continuum of care, as defined in this section.~~
(n)“Navigation center” means a Housing First, low-barrier, service-enriched shelter focused on moving homeless individuals and families into permanent housing that provides temporary living facilities while case managers connect individuals experiencing homelessness to income, public benefits, health services, shelter, and housing.
~~(o)“Program” means the Homeless Housing, Assistance, and Prevention program established pursuant to this chapter.~~
(p)“Program allocation” means the portion of program funds available to expand or develop local capacity to address immediate homelessness challenges, in the amount of six hundred fifty million dollars ($650,000,000).
~~(q)“Recipient” means a jurisdiction that receives funds from the agency for the purposes of the program.~~
50217.
(a)The Homeless Housing, Assistance, and Prevention program is hereby established for the purpose of providing jurisdictions with one-time grant funds to support regional coordination and expand or develop local capacity to address their immediate homelessness challenges informed by a best-practices framework focused on moving homeless individuals and families into permanent housing and supporting the efforts of those individuals and families to maintain their permanent housing.
~~(b)Upon appropriation by the Legislature, the agency shall distribute six hundred fifty million dollars ($650,000,000) in accordance with this chapter.~~
(c)The agency shall administer the program. The program shall provide grant funds to cities, counties, and continuums of care. No more than 5 percent of the funds available pursuant to this chapter shall be expended on state operations.
~~(d)The agency’s decision to approve or deny an application and the determination of the amount of funding to be provided shall be final.~~
~~(e)The agency shall maintain and make available to the public on its internet website records of the following:~~
~~(1)The number of applications for program funding received by the agency.~~
~~(2)The number of applications for program funding denied by the agency.~~
~~(3)The name of each recipient of program funds.~~
~~(4)Each applicant receiving funds pursuant to this chapter shall provide a list of all awards to subrecipients.~~
~~(5)Annual reports filed by recipients pursuant to Section 50221.~~
(f)In administering this chapter, the agency shall not be subject to the rulemaking provisions 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).
50218.
(a)Upon appropriation by the Legislature, six hundred fifty million dollars ($650,000,000) of the funds administered pursuant to this chapter shall be available for implementing the program, as follows:
(1)One hundred ninety million dollars ($190,000,000) of the funding available pursuant to this section shall be available for continuums of care. The agency shall calculate these allocations to a continuum of care based on each continuum of care’s proportionate share of the state’s total homeless population, based on the homeless point-in-time count. The agency shall award no more than 40 percent of the allocation made pursuant to this section and no less than five hundred thousand ($500,000) to an applicant that is a continuum of care.
(2)Two hundred seventy-five million dollars ($275,000,000) of the funding available pursuant to this section shall be available to each city, or city that is also a county, that has a population of 300,000 or more, as of January 1, 2019, according to data published on the Department of Finance’s internet website. The agency shall calculate the allocation to a city based on the city’s proportionate share of the total homeless population of the region served by the continuum of care within which the city is located, based on the homeless point-in-time count. The agency shall not award more than 45 percent of the program allocation to a city. If more than one recipient within the continuum of care meets the requirements of this paragraph, the proportionate share of funds shall be equally allocated to those jurisdictions.
(3)One hundred seventy-five million dollars ($175,000,000) of the funding available pursuant to this section shall be available to each county. The agency shall calculate the allocation to county based on the county’s proportionate share of the total homeless population of region served by the continuum of care within which the county is located, based on the homeless point-in-time count. The agency shall not award more than 40 percent of the allocation made pursuant to this section to a county.
(4)Once the 2019 point-in-time count numbers have been finalized and posted by the United States Department of Housing and Urban Development, and any determinations described in subdivision (j) of Section 50216 have been announced, the agency shall calculate each jurisdiction’s final program allocation award amount and submit that information to the council. The council shall post this information to its internet website.
~~(5)A program recipient shall not use funding from the program to supplant existing local funds for homeless housing, assistance, or prevention.~~
~~(b)A program recipient shall use at least 8 percent, of the funds for services for homeless youth populations.~~
50219.
(a)In order to apply for a program allocation, an applicant shall submit an application pursuant to the timeline specified in Section 50220 and provide the following, in the form and manner prescribed by the agency:
(1)A demonstration of how the jurisdiction has coordinated with other jurisdictions to identify their share of the regional need to address homelessness, and how the requested funds will help meet the jurisdiction’s share of that need.
(2)Identification of all funds currently being used by the applicant to provide housing and homeless services for the homeless populations in the jurisdiction, including all federal, state, and local funds, and information on programs supported by the identified funds.
(3)An assessment of existing programs to address homelessness and an identification of gaps in housing and homeless services for the homeless populations in the jurisdiction, as identified by the continuum of care pursuant to paragraph (7), including those provided by entities other than the applicant.
(4)Identification of how funds requested in the application will complement the funds described in paragraph (2), close the gaps identified pursuant to paragraph (3), and serve the homeless populations identified pursuant to paragraph (7).
~~(5)An outline of proposed uses of funds and explanation of how proposed use of funds meets each of the requirements described in paragraph (4).~~
~~(6)A list of measurable goals including but not limited to the number of individuals served and percentage of individuals successfully placed in permanent housing.~~
(7)If an applicant is a continuum of care, data on the demographics and characteristics of the homeless populations in the jurisdiction and on current programs providing housing and homeless services in the jurisdiction, as reported to the federal government through Homeless Management Information Systems and point-in-time counts.
(8)For a city applying for funds available pursuant to paragraph (2) of subdivision (a) of Section 50218 or a county applying for funds available pursuant to paragraph (3) of subdivision (a) of Section 50218, a plan demonstrating how these funds will complement the regional needs described in the continuum of care’s plan for a coordinated housing and service system that meets the needs of individuals, unaccompanied youth, and families experiencing homelessness, as defined in Section 578.7(c) of Title 24 of the Code of Federal Regulations.
~~(9)Evidence of connection with the continuum of care’s coordinated entry system.~~
~~(10)An agreement to participate in a statewide Homeless Management Information System, when available.~~
~~(b)The agency may request additional documentation and information from the applicant consistent with the requirements of subdivision (a).~~
(c)Except as provided in subdivisions (d) and (e) 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 in accessing permanent housing and to promote housing stability in supportive housing.~~
(5)Systems support for activities necessary to create regional partnerships and maintain a homeless services and housing delivery system, particularly for vulnerable populations including families and homeless youth.
~~(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. Demonstrated need for purposes of this paragraph shall be based on the following:~~
~~(i)The number of available shelter beds in the city, county, or region served by a continuum of care.~~
~~(ii)Shelter vacancy rate in the summer and winter months.~~
~~(iii)Percentage of exits from emergency shelters to permanent housing solutions.~~
~~(iv)A plan to connect residents to permanent housing.~~
~~(d)Up to 5 percent of an applicant’s program allocation may be expended for the following uses that are intended to meet federal requirements for housing funding:~~
~~(1)Strategic homelessness plan, as defined in section 578.7(c) of Title 24 of the Code of Federal Regulations.~~
~~(2)Infrastructure development to support coordinated entry systems and Homeless Management Information Systems.~~
(e)The applicant shall not use more than 7 percent of a program allocation for administrative costs incurred by the city, county, or continuum of care to administer its program allocation. For purposes of this subdivision, “administrative costs” does not include staff or other costs directly related to implementing activities funded by the program allocation.
~~(f)Pursuant to existing law, a recipient shall comply with Section 8255 of the Welfare and Institutions Code.~~
(g)Notwithstanding Section 27011 of the Government Code, or any other statute governing the deposit of funds in the county treasury, a county may accept or deposit into the county treasury, funds from any source for the purpose of administering a project, proposal, or program under this chapter.
(h)For purposes of Section 1090 of the Government Code, a representative of a county serving on a board, committee, or body with the primary purpose of administering funds or making funding recommendations for applications pursuant to this chapter shall have no financial interest in any contract, program, or project voted on by the board, committee, or body on the basis of the receipt of compensation for holding public office or public employment as a representative of the county.
~~(i)The council shall post submitted final applications to its internet website.~~
50220.
~~(a)(1)No later than February 15, 2020, each applicant shall submit to the agency its program allocation application.~~
~~(2)No later than April 1, 2020, the agency shall make award determinations for the program allocations based on the point-in-time count numbers.~~
~~(3)If, after the first round of awards pursuant to this section, not all funds have been awarded by the agency, the agency shall set aside any remaining funds for a second round of awards.~~
~~(4)(A)(i)On or before May 31, 2023, a recipient shall contractually obligate not less than 50 percent of program allocations.~~
(ii)Recipients that are counties shall contractually obligate the full allocation awarded to them by the agency at this time. Any funds that are not contractually obligated by this date shall be reverted to the continuum of care that serves the county.
(B)If less than 50 percent is obligated after May 31, 2023, recipients that are continuums of care and cities shall not expend any remaining portion of the 50 percent of program allocations required to have been obligated pursuant to subparagraph (A) unless and until both of the following occur:
~~(i)On or before June 30, 2023, the recipient submits an alternative disbursement plan that includes an explanation for the delay.~~
~~(ii)The agency approves the alternative disbursement plan.~~
(C)On or before December 31, 2023, recipients that are continuums of care and cities shall return to the agency any funds that have not been expended pursuant to an alternative disbursement plan approved pursuant to subparagraph (B) for a subsequent round of awards by the agency.
~~(b)The agency may request additional information, as needed, to meet other applicable reporting or audit requirements.~~
~~(c)In addition to requirements in Section 50221, the agency may monitor the expenditures and activities of an applicant, as the agency deems necessary, to ensure compliance with program requirements.~~
(d)The agency may, as it deems appropriate or necessary, request the repayment of funds from an applicant, or pursue any other remedies available to it by law for failure to comply with program requirements.
~~(e)Any remaining amounts of program allocation funds not expended by June 30, 2025, shall revert to, and be paid and deposited in, the General Fund.~~
50221.
(a)After receiving program funds, a recipient, by January 1 of the year following receipt of the funds and annually on that date thereafter until all funds have been expended, shall submit a report to the agency on a form and method provided by the agency, that includes all of the following, as well as any additional information the agency deems appropriate or necessary:
~~(1)An ongoing tracking of the specific uses and expenditures of any program funds broken out by eligible uses listed, including the current status of those funds.~~
~~(2)The number of homeless individuals served by the program funds in that year, and a total number served in all years of the program, as well the homeless population served.~~
~~(3)The types of housing assistance provided, broken out by the number of individuals.~~
(4)Outcome data for an individual served through program funds, including the type of housing that an individual exited to, the percent of successful housing exits, and exit types for unsuccessful housing exits.
(b)No later than January 1, 2026, each applicant that receives a program allocation shall submit to the agency a final report in a format provided by the agency, as well as detailed uses of all program funds.
(c)The agency shall post this information to its internet website within 30 days of receipt and provide notice to the Senate Housing Committee, Assembly Housing and Community Development Committee, and the appropriate Fiscal Committees.
SEC. 11.Chapter 3.1 (commencing with Section 50515) is added to Part 2 of Division 31 of the Health and Safety Code, to read:
3.1.Local Government Planning Support Grants Program
50515.
~~For purposes of this chapter:~~
~~(a)“Annual progress report” means the annual report required to be submitted to the department pursuant to paragraph (2) of subdivision (a) of Section 65400 of the Government Code.~~
(b)“Completed entitlement” means a housing development project that has received all the required land use approvals or entitlements necessary for the issuance of a building permit and for which no additional action, including environmental review or appeals, is required to be eligible to apply for and obtain a building permit.
(c)“Council of governments” means a single or multicounty council created by a joint powers agreement pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code that is responsible for allocating regional housing need pursuant to Sections 65584, 65584.04, and 65584.05 of the Government Code.
(d)“Housing element” or “element” means the housing element of a community’s general plan, as required pursuant to subdivision (c) of Section 65302 of the Government Code and prepared in accordance with Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code.
~~(e)“Jurisdiction” means a city, county, or city and county.~~
~~(f)“Program” means the Local Government Planning Support Grants Program established pursuant to this chapter.~~
(g)“Regional housing need assessment” means the existing and projected need for housing for each region, as determined by the department pursuant to Section 65584.01 of the Government Code.
50515.01.
(a)(1)The Local Government Planning Support Grants Program is hereby established for the purpose of providing regions and jurisdictions with one-time funding, including grants for planning activities to enable jurisdictions to meet the sixth cycle of the regional housing need assessment.
(2)Upon appropriation by the Legislature, two hundred fifty million dollars ($250,000,000) shall be distributed under the program in accordance with this chapter, as provided in Sections 50515.02 and 50515.03.
(b)The department shall administer the program and, consistent with the requirements of this chapter, provide grants to regions and 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.
(c)Of the total amount of any moneys appropriated for purposes of this chapter, the department shall set aside up to 5 percent for program administration, including state operations expenditures and technical assistance, as well as expenditures by recipients of funding pursuant to Sections 50515.02 and 50515.03.
50515.02.
Of the amount described in paragraph (2) of subdivision (a) of Section 50515.01, one hundred twenty-five million dollars ($125,000,000) shall be available to councils of governments and other regional entities, as follows:
~~(a)The moneys allocated pursuant to this subdivision shall be available to the following entities:~~
~~(1)The Association of Bay Area Governments, representing the Counties of Alameda, Contra Costa, Marin, Napa, San Mateo, Santa Clara, Solano, and Sonoma, and the City and County of San Francisco.~~
~~(2)The Sacramento Area Council of Governments, representing the Counties of El Dorado, Placer, Sacramento, Sutter, Yolo, and Yuba.~~
~~(3)The San Diego Association of Governments, representing the County of San Diego.~~
~~(4)The Southern California Association of Governments, representing the Counties of Imperial, Los Angeles, Orange, Riverside, San Bernardino, and Ventura.~~
(5)A central coast multiagency working group, formed in accordance with subdivision (c), consisting of the Association of Monterey Bay Area Governments, the San Luis Obispo Council of Governments, and the Santa Barbara County Association of Governments, representing the Counties of Monterey, San Benito, San Luis Obispo, Santa Barbara, and Santa Cruz.
(6)A San Joaquin Valley multiagency working group, formed in accordance with subdivision (c), consisting of the Fresno Council of Governments, the Kern Council of Governments, the Kings County Association of Governments, the Madera County Transportation Commission, the Merced County Association of Governments, the San Joaquin Council of Governments, the Stanislaus Council of Governments, and the Tulare County Association of Governments, representing the Counties of Fresno, Kern, Kings, Madera, Merced, San Joaquin, Stanislaus, and Tulare.
(7)Councils of governments from the Counties of Butte, Humboldt, Lake, and Mendocino. Notwithstanding any other provision of this chapter, the councils of governments described in this paragraph may apply directly to the department for funds pursuant to the program.
(8)The Counties of Alpine, Amador, Calaveras, Colusa, Del Norte, Glenn, Inyo, Lassen, Mariposa, Modoc, Mono, Nevada, Plumas, Shasta, Sierra, Siskiyou, Tehama, Tuolumne, and Trinity. Notwithstanding any other provision of this chapter, the counties described in this paragraph may apply directly to the department for funds pursuant to the program. The department may approve a fiscal agent to receive funds from the amount identified in this section on behalf of a county or consortium of counties listed in this paragraph.
(b)(1)Except as otherwise provided in paragraphs (7) and (8) of subdivision (a), the department shall make the allocations required by this subdivision to each regional entity on behalf all of the jurisdictions represented by that entity. The department shall calculate the amount of each allocation in accordance with the population estimates consistent with the methodology described in subdivision (a) of Section 50515.03.
(2)Each council of governments or other regional entity may, in consultation with the department and consistent with the requirements of this chapter, determine the appropriate use of funds or suballocations within its boundaries to appropriately address its unique housing and planning priorities.
~~(c)The following shall apply with respect to any allocation made pursuant to this subdivision to a multiagency working group, as described in paragraphs (5) and (6) of subdivision (a):~~
~~(1)Before November 30, 2019, the multiagency working groups described in paragraphs (5) and (6) of subdivision (a) shall be formed as follows:~~
~~(A)Each working group shall consist of the following members:~~
~~(i)One representative from each county described in paragraph (5) or (6), as applicable, of subdivision (a).~~
(ii)Two city representatives from each county described in paragraph (5) or (6), as applicable, of subdivision (a) appointed by the city selection committee for that county. In appointing city representatives, the city selection committee shall appoint one representative of a larger city within the county and one representative of a smaller city within the county.
(iii)Of the three representatives from each county serving on the multiagency working group pursuant to clauses (i) and (ii), at least one of the representatives shall also be a member of the governing body of the applicable council of governments representing the county.
(B)The multiagency working group shall select a council of governments to serve as the fiscal agent of the multiagency working group and identify staff to assist the work of the group. If the multiagency working group fails to agree to the selection of a council of governments to serve as fiscal agent pursuant to this clause within a reasonable time period, the department shall select a fiscal agent based on factors such as capacity and experience in administering grant programs.
(C)Upon its formation, the multiagency working group shall notify each city and county that is a member of a council of governments described in paragraph (5) or (6), as applicable, of subdivision (a) of its purpose pursuant to this section.
(2)In recognition of the unique challenges in developing a process through a multiagency working group, the department shall allocate eight million dollars ($8,000,000) of the amount available pursuant to this subdivision to the multiagency working groups described in described in paragraphs (5) and (6) of subdivision (a), as follows:
~~(A)Twenty-five percent of the amount subject to this subparagraph shall be allocated to the central coast multiagency working group described in paragraph (5) of subdivision (a).~~
~~(B)Seventy-five percent of the amount subject to this subparagraph shall be allocated to the San Joaquin Valley multiagency working group described in paragraph (6) of subdivision (a).~~
(d)(1)Until January 31, 2021, a council of governments or other regional entity described in subdivision (a), or a county described in paragraph (8) of subdivision (a), may request an allocation of funds pursuant to this section by submitting an application, in the form and manner prescribed by the department, that includes the following information:
~~(A)An allocation budget for the funds provided pursuant to this section.~~
~~(B)The amounts retained by the council of governments, regional entity, or county, and any suballocations to jurisdictions.~~
~~(C)An explanation of how proposed uses will increase housing planning and facilitate local housing production.~~
(D)Identification of current best practices at the regional and statewide level that promote sufficient supply of housing affordable to all income levels, and a strategy for increasing adoption of these practices at the regional level, where viable.
~~(E)An education and outreach strategy to inform local agencies of the need and benefits of taking early action related to the sixth cycle regional needs allocation.~~
(2)The department shall review an application submitted pursuant to this subdivision within 30 days. Upon approval of an application for funds pursuant to this subdivision, the department shall award the moneys for which the council of governments, other regional entity, or county, as applicable, qualifies.
(e)A council of governments, other regional entity, or county that receives an allocation of funds pursuant to this section shall establish priorities and use those moneys to increase housing planning and accelerate housing production, as follows:
(1)Developing an improved methodology for the distribution of the sixth cycle regional housing need assessment to further the objectives described in subdivision (d) of Section 65584 of the Government Code.
(2)Suballocating moneys directly and equitably to jurisdictions or other subregional entities in the form of grants, to be used in accordance with subdivision (f), for planning that will accommodate the development of housing and infrastructure that will accelerate housing production in a way that aligns with state planning priorities, housing, transportation, equity, and climate goals.
(3)Providing jurisdictions and other local agencies with technical assistance, planning, temporary staffing or consultant needs associated with updating local planning and zoning documents, expediting application processing, and other actions to accelerate additional housing production.
~~(4)Covering the costs of administering any programs described in this subdivision.~~
(f)An entity that receives a suballocation of funds pursuant to paragraph (2) of subdivision (e) shall only use that suballocation for housing-related planning activities, including, but not limited to, the following:
~~(1)Technical assistance in improving housing permitting processes, tracking systems, and planning tools.~~
~~(2)Establishing regional or countywide housing trust funds for affordable housing.~~
~~(3)Performing infrastructure planning, including for sewers, water systems, transit, roads, or other public facilities necessary to support new housing and new residents.~~
~~(4)Performing feasibility studies to determine the most efficient locations to site housing consistent with Sections 65041.1 and 65080 of the Government Code.~~
~~(5)Covering the costs of temporary staffing or consultant needs associated with the activities described in paragraphs (1) to (4), inclusive.~~
50515.03.
Of the amount described in paragraph (2) of subdivision (a) of Section 50515.01, one hundred twenty-five million dollars ($125,000,000) shall be available to jurisdictions to assist in planning for other activities related to meeting the sixth cycle regional housing need assessment, as follows:
~~(a)(1)The maximum amount that a jurisdiction may receive pursuant to this subdivision shall be as follows:~~
~~(A)If the jurisdiction has a population of 750,000 or greater, one million five hundred thousand dollars ($1,500,000).~~
~~(B)If the jurisdiction has a population of 300,000 or greater, but equal to or less than 749,999, seven hundred fifty thousand dollars ($750,000).~~
~~(C)If the jurisdiction has a population of 100,000 or greater, but equal to or less than 299,999, five hundred thousand dollars ($500,000).~~
~~(D)If the jurisdiction has a population of 60,000 or greater, but equal to or less than 99,999, three hundred thousand dollars ($300,000).~~
~~(E)If the jurisdiction has a population of 20,000 or greater, but equal to or less than 59,999, one hundred fifty thousand dollars ($150,000).~~
~~(F)If the jurisdiction has a population equal to or less than 19,999, sixty-five thousand dollars ($65,000).~~
~~(2)For purposes of this subdivision, the population of a jurisdiction shall be based on the population estimates posted on the Department of Finance’s internet website as of January 1, 2019.~~
(b)(1)Until July 1, 2020, a jurisdiction may request an allocation of funds pursuant to this section by submitting an application to the department, in the form and manner prescribed by the department, that contains the following information:
~~(A)An allocation budget for the funds provided pursuant to this section.~~
~~(B)An explanation of how proposed uses will increase housing planning and facilitate local housing production.~~
(2)The department shall review an application submitted pursuant to this subdivision within 30 days. Upon approval of an application for funds pursuant to this subdivision, the department shall award the moneys for which the jurisdiction qualifies.
~~(c)A jurisdiction that receives an allocation pursuant to this section shall only use that allocation for housing-related planning activities, including, but not limited to, the following:~~
(1)Rezoning and encouraging development by updating planning documents and zoning ordinances, such as general plans, community plans, specific plans, sustainable communities’ strategies, and local coastal programs.
~~(2)Completing environmental clearance to eliminate the need for project-specific review.~~
(3)Establishing a workforce housing opportunity zone pursuant to Article 10.10 (commencing with Section 65620) of Chapter 3 of Division 1 of Title 7 of the Government Code or a housing sustainability district pursuant to Chapter 11 (commencing with Section 66200) of Division 1 of Title 7 of the Government Code.
~~(4)Performing infrastructure planning, including for sewers, water systems, transit, roads, or other public facilities necessary to support new housing and new residents.~~
~~(5)Partnering with other local entities to identify and prepare excess property for residential development.~~
~~(6)Revamping local planning processes to speed up housing production.~~
~~(7)Developing or improving an accessory dwelling unit ordinance in compliance with Section 65852.2 of the Government Code.~~
~~(8)Covering the costs of temporary staffing or consultant needs associated with the activities described in paragraphs (1) to (7), inclusive.~~
50515.04.
(a)(1)Subject to paragraph (2), a council of governments, other regional entity, or jurisdiction, as applicable, that receives an allocation of program funds pursuant to Section 50515.02 or 50515.03 shall submit a report, in the form and manner prescribed by the department, to be made publicly available on its internet website, by April 1 of the year following the receipt of those funds, and annually thereafter until those funds are expended, that contains the following information:
(A)The status of the proposed uses listed in the entity’s application for funding and the corresponding impact on housing within the region or jurisdiction, as applicable, categorized based on the eligible uses specified in Section 50515.02 or 50515.03, as applicable.
~~(B)A summary of building permits, certificates of occupancy, or other completed entitlements issued by entities within the region or by the jurisdiction, as applicable.~~
(2)A city or county that receives program funds shall, in lieu of providing a separate annual report pursuant to this subdivision, provide the information required by paragraph (1) as part of its annual progress report.
~~(b)(1)The department shall maintain records of the following and provide that information publicly on its internet website:~~
~~(A)The name of each applicant for program funds and the status of that entity’s application.~~
~~(B)The number of applications for program funding received by the department.~~
~~(C)The information described in subdivision (a) for each recipient of program funds.~~
~~(2)The department may request additional information, as needed, to meet other applicable reporting or audit requirements.~~
~~(c)(1)Each recipient of funds under the program shall expend those funds no later than December 31, 2023.~~
(2)No later than December 31, 2024, each council of governments, other regional entity, or county that receives an allocation of funds pursuant to Section 50515.02 shall submit a final report on the use of those funds to the department. The report required by this paragraph shall include an evaluation of jurisdiction actions taken in support of the entity’s proposed uses of those funds, as specified in the entity’s application, including which actions had greatest impact on housing production.
~~(d)The department may monitor expenditures and activities of an applicant, as the department deems necessary, to ensure compliance with program requirements.~~
(e)The department may, as it deems appropriate or necessary, request the repayment of funds from an applicant, or pursue any other remedies available to it by law for failure to comply with program requirements.
(f)The department may implement the program through the issuance of forms, guidelines, and one or more notices of funding availability, as the department deems necessary, to exercise the powers and perform the duties conferred on it by this chapter. Any forms, guidelines, and notices of funding availability adopted pursuant to this section are hereby exempted from the rulemaking provisions 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).
~~(g)The department’s decision to approve or deny an application or request for funding pursuant to the program, and its determination of the amount of funding to be provided, shall be final.~~
50515.05.
(a)It is the intent of the Legislature to revamp the existing regional housing need allocation process described in Sections 65584 to 65584.2, inclusive, of the Government Code in order to accomplish the following objectives:
~~(1)Create a fair, transparent, and objective process for identifying housing needs across the state.~~
~~(2)Strategically plan for housing growth according to statewide priorities, consistent with Section 65041.1 of the Government Code, and expected future need for housing at all income levels.~~
~~(3)Encourage increased development to address the state’s housing affordability issues.~~
~~(4)Improve compliance and outcomes through incentives and enforcement.~~
(b)(1)By December 31, 2022, the department, in collaboration with the Office of Planning and Research and after engaging in stakeholder participation, shall develop a recommended improved regional housing need allocation process and methodology that promotes and streamlines housing development and substantially addresses California’s housing shortage.
(2)In developing the recommendations required by this subdivision, the department may appoint a third-party consultant to facilitate a comprehensive review of the current regional housing need allocation process and methodology.
(c)Upon completion of the process described in subdivision (b), the department shall submit a report of its findings and recommendations to the Legislature. The report required to be submitted pursuant to this subdivision shall be submitted in compliance with Section 9795 of the Government Code.
SEC. 12.Section 50517.5 of the Health and Safety Code is amended to read:
50517.5.
(a)(1)The department shall establish the Joe Serna, Jr. Farmworker Housing Grant Program under which, subject to the availability of funds therefor, grants or loans, or both, shall be made to local public entities, nonprofit corporations, limited liability companies, and limited partnerships, for the construction or rehabilitation of housing for agricultural employees and their families or for the acquisition of manufactured housing as part of a program to address and remedy the impacts of current and potential displacement of farmworker families from existing labor camps, mobilehome parks, or other housing. Under this program, grants or loans, or both, may also be made for the cost of acquiring the land and any building thereon in connection with housing assisted pursuant to this section and for the construction and rehabilitation of related support facilities necessary to the housing. In its administration of this program, the department shall disburse grants or loans, or both, to the local public entities, nonprofit corporations, limited liability companies, or limited partnerships or may, at the request of the local public entity, nonprofit corporation, limited liability company, or limited partnership that sponsors and supervises the rehabilitation or construction program, disburse grant funds to agricultural employees who are participants in a rehabilitation or construction program sponsored and supervised by the local public entity, nonprofit corporation, limited liability company, or limited partnership. No part of a grant or loan made pursuant to this section may be used for project organization or planning.
(2)Notwithstanding any other provision of this chapter, upon the request of a grantee the program also may loan funds to a grantee at no more than 3 percent simple interest. Principal and accumulated interest is due and payable upon completion of the term of the loan. For multifamily housing loans made pursuant to this subdivision, the department shall require annual loan payments in the minimum amount necessary to cover the costs of project monitoring. For the first 30 years of the loan term, the amount of the required loan payments shall not exceed 0.42 percent per annum. For any loan made pursuant to this subdivision, the performance requirements of the lien shall remain in effect for a period of no less than the original term of the loan.
~~(3)The program shall be administered by the Director of Housing and Community Development and officers and employees of the department as they may designate.~~
(b)(1)The Joe Serna, Jr. Farmworker Housing Grant Fund is hereby created in the State Treasury. Notwithstanding Section 13340 of the Government Code, all money in the fund is continuously appropriated to the department for making grants or loans, or both, pursuant to this section and Section 50517.10, for purposes of Chapter 8.5 (commencing with Section 50710), and for costs incurred by the department in administering these programs.
~~(2)There shall be paid into the fund the following:~~
~~(A)Any moneys appropriated and made available by the Legislature for purposes of the fund.~~
~~(B)Any moneys that the department receives in repayment or return of grants or loans from the fund, including any interest therefrom.~~
~~(C)Any other moneys that may be made available to the department for the purposes of this chapter from any other source or sources.~~
(D)All moneys appropriated to the department for the purposes of Chapter 8.5 (commencing with Section 50710) and any moneys received by the department from the occupants of housing or shelter provided pursuant to Chapter 8.5 (commencing with Section 50710). These moneys shall be separately accounted for from the other moneys deposited in the fund.
~~(c)With respect to the supervision of grantees, the department shall do the following:~~
~~(1)Establish minimum capital reserves to be maintained by grantees.~~
(2)Fix and alter from time to time a schedule of rents that may be necessary to provide residents of housing assisted pursuant to this section with affordable rents to the extent consistent with the maintenance of the financial integrity of the housing project. No grantee shall increase the rent on any unit constructed or rehabilitated with the assistance of funds provided pursuant to this section without the prior permission of the department, which shall be given only if the grantee affirmatively demonstrates that the increase is required to defray necessary operating costs or avoid jeopardizing the fiscal integrity of the housing project.
(3)Determine standards for, and control selection by grantees of, tenants and subsequent purchasers of housing constructed or rehabilitated with the assistance of funds provided pursuant to this section.
(4)(A)Require as a condition precedent to a grant or loan, or both, of funds that the applicant have site control that is satisfactory to the department; that the grantee be record owner in fee of the assisted real property or provide other security including a lien on the manufactured home that is satisfactory to the department to ensure compliance with the construction, financial, and program obligations; and that the grantee shall have entered into a written agreement with the department binding upon the grantee and successors in interest to the grantee. The agreement shall include the conditions under which the funds advanced may be repaid. The agreement shall include provisions for a lien on the assisted real property or manufactured home in favor of the State of California for the purpose of securing performance of the agreement. The agreement shall also provide that the lien shall endure until released by the Director of Housing and Community Development.
(B)If funds granted or loaned pursuant to this section constitute less than 25 percent of the total development cost or value, whichever is applicable, of a project assisted under this section, the department may adopt, by regulation, criteria for determining the number of units in a project to which the restrictions on occupancy contained in the agreement apply. In no event may these regulations provide for the application of the agreement to a percentage of units in a project that is less than the percentage of total development costs that funds granted or loaned pursuant to this section represent.
(C)Contemporaneously with the disbursement of the initial funds to a grantee, the department shall cause to be recorded, in the office of the county recorder of the county in which the assisted real property is located, a notice of lien executed by the Director of Housing and Community Development. The notice of lien shall refer to the agreement required by this paragraph for which it secures and it shall include a legal description of the assisted real property that is subject to the lien. The notice of lien shall be indexed by the recorder in the Grantor Index to the name of the grantee and in the Grantee Index to the name of the State of California, Department of Housing and Community Development. For manufactured housing, the liens shall be recorded by the department in the same manner as other manufactured housing liens are recorded. The department shall adopt by regulation criteria for the determination of the lien period. This regulation shall take into account whether the property is held by multifamily rental, single-family ownership, or cooperative ownership and whether it is new construction or rehabilitative construction. The lien period for manufactured housing liens for manufactured homes shall not exceed 10 years.
(D)Pursuant to regulations adopted by the department, the department may execute and cause to be recorded in the office of the recorder of the county in which a notice of lien has been recorded, or the department, as appropriate, a subordination of the lien. The regulations adopted by the department shall provide that any subordination of the lien shall not jeopardize the security interest of the state and shall further the interest of farmworker housing. The recitals contained in the subordination shall be conclusive in favor of any bona fide purchaser or lender relying thereon.
(E)Prior to funds granted pursuant to this section being used to finance the acquisition of a manufactured home, the grantee shall ensure that the home either is already installed in a location where it will be occupied by the eligible household or that a location has been leased or otherwise made available for the manufactured home to be occupied by the eligible household.
~~(5)Regulate the terms of occupancy agreements or resale controls, to be used in housing assisted pursuant to this section.~~
~~(6)Provide linguistically appropriate services and publications, or require grantees to do so, as necessary to implement the purposes of this section.~~
~~(7)The agreement between the department and the grantee shall provide, among other things, that both of the following occur:~~
(A)Upon the sale or conveyance of the real property, or any part thereof, for use other than for agricultural employee occupancy, the grantee or its successors shall, as a condition for the release of the lien provided pursuant to paragraph (4), repay to the fund the department’s grant and loan funds.
(B)Upon the sale or conveyance of the real property or any part thereof for continued agricultural employee occupancy, the transferee shall assume the obligation of the transferor and the real property shall be transferred to the new owner; provided that the transferee agrees to abide by the agreement entered into between the transferor and the department and that the new owner takes the property subject to the lien provided pursuant to paragraph (4), except that this lien shall, at the time of the transfer of the property to the new owner, be extended for an additional lien period determined by the department pursuant to paragraph (4), and the new owner shall not be credited with the lien period that had run from the time the transferor had acquired the property to the time of transfer to the new owner, unless the department determines that it is in the best interest of the state and consistent with the intent of this section to so credit the lien period to the new owner. However, the lien shall have priority as of the recording date of the lien for the original grantee, pursuant to paragraph (4).
~~(d)The department may do any of the following with respect to grantees:~~
(1)Through its agents or employees enter upon and inspect the lands, buildings, and equipment of a grantee, including books and records, at any time before, during, or after construction or rehabilitation of units assisted pursuant to this section. However, there shall be no entry or inspection of any unit that is occupied, whether or not any occupant is actually present, without the consent of the occupant.
(2)Supervise the operation and maintenance of any housing assisted pursuant to this section and order repairs as may be necessary to protect the public interest or the health, safety, or welfare of occupants of the housing.
(e)The department shall include in its annual report required by Section 50408, a current report of the Joe Serna, Jr. Farmworker Housing Grant Program. The report shall include, but need not be limited to, (1) the number of households assisted, (2) the average income of households assisted and the distribution of annual incomes among assisted households, (3) the rents paid by households assisted, (4) the number and amount of grants or loans, or both, made to each grantee in the preceding year, (5) the dollar value of funding derived from sources other than the state for each project receiving a grant or loan, or both, under this section, and an identification of each source, (6) recommendations, as needed, to improve operations of the program and respecting the desirability of extending its application to other groups in rural areas identified by the department as having special need for state housing assistance, and (7) the number of manufactured housing units assisted under this section.
~~(f)As used in this section:~~
(1)“Agricultural employee” has the same meaning as specified in subdivision (b) of Section 1140.4 of the Labor Code, but also includes any person who works on or off the farm in the processing of any agricultural commodity until it is shipped for distribution, whether or not this person is encompassed within the definition specified in subdivision (b) of Section 1140.4 of the Labor Code.
(2)“Grantee” means the local public entity, nonprofit corporation, limited liability company, or limited partnership that is awarded the grant or loan, or both, under this section, and, at the request thereof, may include an agricultural employee receiving direct payment of a grant for rehabilitation under this section who occupies the assisted housing both before and after the rehabilitation and may include an agricultural employee receiving direct payment of a grant for construction under this section who will occupy the assisted housing and who is a participant in a rehabilitation or construction program sponsored and supervised by a local public entity, nonprofit corporation, limited liability company, or limited partnership.
~~(3)“Housing” may include, but is not necessarily limited to, conventionally constructed units and manufactured housing installed pursuant to either Section 18551 or 18613.~~
~~(4)“Limited liability company” means a limited liability company where all the members are nonprofit public benefit corporations.~~
(5)“Limited partnership” means a limited partnership where all of the general partners are either nonprofit public benefit corporations, limited liability companies, or a combination of nonprofit public benefit corporations and limited liability companies.
~~(g)The department may provide the assistance offered pursuant to this chapter in any area where there is a substantial unmet need for farmworker housing.~~
SEC. 13.Section 50517.6 of the Health and Safety Code is amended to read:
50517.6.
(a) The department may set aside the amount of funds authorized by subdivision (d) for the purposes of curing or averting a default on the terms of any loan or other obligation by the recipient of financial assistance, or bidding at any foreclosure sale where the default or foreclosure sale would jeopardize the department’s security in the dwelling unit assisted pursuant to this chapter.
(b) The department may use the set-aside funds made available pursuant to this chapter to repair or maintain any dwelling unit assisted pursuant to this chapter that was acquired to protect the department’s security interest in the dwelling unit.
(c) The payment or advance of funds by the department pursuant to this section shall be exclusively within the department’s discretion, and no person shall be deemed to have any entitlement to the payment or advance of those funds. The amount of any funds expended by the department for the purposes of curing or averting a default shall be added to any grant amount secured by the lien and shall be payable to the department upon demand.
(d) On the effective date of the act that adds this section, the department may set aside up to two hundred thousand dollars ($200,000) from the Joe Serna, Jr. Farmworker Housing Grant Fund for the purposes authorized by this section. On July 1 of each subsequent fiscal year, the department may set aside, for the purposes of this section, up to 1.5 percent of the funds available in the Joe Serna, Jr. Farmworker Housing Grant Fund on that date.
SEC. 14.Section 50517.7 of the Health and Safety Code is amended to read:
50517.7.
In counties in which a disaster has been declared by the Governor pursuant to Chapter 7 (commencing with Section 8550) of Division 1 of Title 2 of the Government Code and for a period of 12 months after the declaration, the department may provide grants from the fund established by subdivision (b) of Section 50517.5, subject to the following terms and conditions, which are applicable only to this section:
(a) Grants may be made to local public entities, nonprofit corporations, and housing owners comprised of either homeowners who are agricultural employees or owners of rental property used primarily by agricultural households.
(b) The department may enter into master agreements with nonprofit corporations or local public entities or it may enter into contracts directly with housing owners to carry out the activities authorized by this section.
(c) The department may make grants directly to housing owners or through master agreements for the cost of preparation of applications for funds, and supervision of expenditures from the fund, including, but not limited to estimates, work writeups, bidding supervision, and inspections. Funds granted pursuant to this subdivision shall not be secured by, and subject to, the liens required by Section 50517.5.
(d) The department, either directly or through master agreements, may provide grants to housing owners which shall be used for housing rehabilitation or acquisition and rehabilitation, and related costs, other than those costs accruing pursuant to subdivision (c). Only those funds from the fund which are actually utilized pursuant to this subdivision shall be secured by, and subject to, the liens required by Section 50517.5.
SEC. 15.Section 50650 of the Health and Safety Code is amended to read:
50650.
~~The Legislature finds and declares as follows:~~
(a) An adequate supply of safe and affordable housing is the foundation for strong and sustainable communities. Owner occupied housing is a key housing resource, contributing to neighborhood stability as well as economic vitality.
(b) In California, homeownership is beyond the reach of a large segment of the population. There are also many homeowners who lack the resources to make necessary repairs to their homes, or who would welcome the opportunity to share them with suitable tenants.
(c) Reflecting California’s diversity, there is a variety of proven approaches to the promotion of homeownership within the state. The purpose of the CalHome Program established by this chapter is to support existing homeownership programs aimed at lower and very low income households, and in the case of a disaster, as defined in Section 8680.3 of the Government Code, households at or below moderate income, and operated by private nonprofit and local government agencies, and thereby to increase homeownership, encourage neighborhood revitalization and sustainable development, and maximize use of existing homes.
(d) The CalHome Program is intended to take the place of the Senior Citizens’ Shared Housing Program established by Chapter 3.6 (commencing with Section 50533), which is repealed by the act enacting this chapter.
SEC. 16.Section 50650.3 of the Health and Safety Code is amended to read:
50650.3.
(a)Funds appropriated for purposes of this chapter shall be used to enable low- and very low income households to become or remain homeowners as provided in paragraphs (1) and (2), and to provide disaster relief assistance to households at or below 120 percent of area median income as provided in paragraph (3). Funds shall be provided by the department to local public agencies or nonprofit corporations as any of the following:
~~(1)Grants for programs that assist individual households.~~
~~(2)Loans that assist development projects involving multiple home ownership units, including single-family subdivisions.~~
~~(3)Grants for programs that assist individual households as provided in subdivision (g).~~
(b)(1)Grant funds may be used for first-time homebuyer downpayment assistance, home rehabilitation, including the installation or retrofit of ignition resistant exterior components on existing manufactured homes, mobilehomes, and accessory structures required pursuant to Article 2.3 (commencing with Section 4200) of Subchapter 2 of Chapter 3 of Division 1 of Title 25 of the California Code of Regulations, homebuyer counseling, home acquisition and rehabilitation, or self-help mortgage assistance programs, or for technical assistance for self-help and shared housing home ownership.
(2)Home rehabilitation funding for the purpose of installing ignition resistant components on manufactured homes, mobilehomes, or accessory structures pursuant to this subdivision shall not be conditioned upon the rehabilitation of additional or unrelated home components unless that rehabilitation is required pursuant to Article 2.3 (commencing with Section 4200) of Subchapter 2 of Chapter 3 of Division 1 of Title 25 of the California Code of Regulations. In administering funding for this purpose, local public agencies and nonprofit corporations may consider the condition and age of the manufactured home or mobilehome, including whether the home was constructed on or after June 15, 1976, in accordance with federal standards and whether the available funds could be more effectively used to replace the manufactured home or mobilehome.
(c)(1)Except as provided in subdivision (e), loan funds may be used for purchase of real property, site development, predevelopment, and construction period expenses incurred on home ownership development projects, and permanent financing for mutual housing or cooperative developments. Upon completion of construction, the department may convert project loans into grants for programs of assistance to individual homeowners. Except as provided in paragraph (2), financial assistance provided to individual households shall be in the form of deferred payment loans, repayable upon sale or transfer of the homes, when they cease to be owner-occupied, or upon the loan maturity date. Financial assistance may be provided in the form of a secured forgivable loan to an individual household to rehabilitate, repair, or replace manufactured housing located in a mobilehome park and not permanently affixed to a foundation. The loan shall be due and payable in 20 years, with 10 percent of the original principal to be forgiven annually for each additional year beyond the 10th year that the home is owned and continuously occupied by the borrower. Not more than 10 percent of the funds available for the purposes of this chapter in a fiscal year shall be used for financial assistance in the form of secured forgivable loans.
(2)Notwithstanding any other law, the department may, in its discretion, permit the downpayment assistance loan to be subordinated to refinancing if it determines that the borrower has demonstrated hardship, subordination is required to avoid foreclosure, and the new loan meets the department’s underwriting requirements. The department may permit subordination on those terms and conditions as it determines are reasonable, however subordination shall not be permitted if the borrower has sufficient equity to repay the loan.
(d)All loan repayments shall be used for activities allowed under this section, and shall be governed by a reuse plan approved by the department. Those reuse plans may provide for loan servicing by the grant recipient or a third-party local government agency or nonprofit corporation.
(e)Notwithstanding subdivision (c), loans provided pursuant to the CalHome Program Disaster Assistance for Imperial County that have been made for the purpose of rehabilitation, reconstruction, or replacement of lower income owner-occupied manufactured homes shall be due and payable in 10 years, with 20 percent of the original principal to be forgiven annually for each additional year beyond the fifth year that the manufactured home is owned and continuously occupied by the borrower.
(f)The department may use funds appropriated pursuant to this chapter to make grants to local agencies or nonprofit corporations to construct accessory dwelling units as defined in Section 65852.2 of the Government Code or junior accessory dwelling units as defined in Section 65852.22 of the Government Code, and to repair, reconstruct, or rehabilitate, in whole or in part, accessory dwelling units and junior accessory dwelling units.
(g)Notwithstanding any other provision of this chapter, the department may use funds appropriated pursuant to this chapter to make grants to local agencies or nonprofit corporations to assist households at or below 120 percent of area median income 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, pursuant to Section 8625 of the Government Code, resulting from a disaster, as defined in Section 8680.3 of the Government Code.~~
~~(2)A special appropriation of federal emergency supplemental assistance or a presidential declaration of disaster has occurred.~~
(h)The department shall review, adopt, amend, and repeal guidelines to implement the making of grants pursuant to subdivisions (f) and (g). Any guidelines adopted to implement subdivisions (f) and (g) 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. In the event of inconsistency regarding the requirements of qualified applicants and eligibility of accessory dwelling units and junior accessory dwelling units, and rents associated with them between those guidelines and any regulations otherwise enacted pursuant to this chapter, those guidelines shall prevail.
SEC. 17.Section 50650.4 of the Health and Safety Code is amended to read:
50650.4.
(a)To be eligible to receive a grant or loan, local public agencies or nonprofit corporations shall demonstrate sufficient organizational stability and capacity to carry out the activity for which they are requesting funds, including, where applicable, the capacity to manage a portfolio of individual loans over an extended time period. Capacity may be demonstrated by substantial successful experience performing similar activities, or through other means acceptable to the department. In administering the CalHome program, the department may permit local agencies and nonprofit corporations to apply their own underwriting guidelines when evaluating CalHome rehabilitation loan applications, following prior review and approval of those guidelines by the department. The local agency or nonprofit corporation shall not subsequently alter its underwriting guidelines with respect to the use of CalHome funds without review and approval by the department, including how the local agencies and nonprofit corporations will ensure participation by low-income households if making loans in response to a disaster as described in paragraph (1) of subdivision (g) of Section 50650.3. In allocating funds, the department shall utilize a competitive application process, using weighted evaluation criteria, including, but not limited to, the extent that the program or project utilizes volunteer or self-help labor, trains youth and young adults in construction skills, creates balanced communities, involves community participation, or whether the program or project contributes toward community revitalization. To the extent feasible, the application process shall ensure a reasonable geographic distribution of funds.
(b)In administering department funds received pursuant to subdivision (a), local public agencies and nonprofit corporations shall not deny the funding application of, or apply different underwriting guidelines to, a housing program or project solely on the basis of either of the following:
~~(1)The home is a manufactured home or mobilehome, as defined in Sections 18007 and 18008.~~
~~(2)The home is located in a mobilehome park or in a manufactured housing community, as defined in Sections 18210.7 and 18214.~~
SEC. 18.Section 50843.5 of the Health and Safety Code is amended to read:
50843.5.
(a)Subject to the availability of funding, the department shall make matching grants available to cities, counties, cities and counties, tribes, and charitable nonprofit organizations organized under Section 501(c)(3) of the Internal Revenue Code that have created and are operating or will operate housing trust funds. These funds shall be awarded through the issuance of a Notice of Funding Availability (NOFA). The department may adopt guidelines to administer this chapter. Any guidelines employed by the department in implementing this chapter shall not 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). Notwithstanding anything to the contrary in this chapter, the terms of this section, and the guidelines authorized above, shall control in the event of any other statutory conflict.
~~(1)Applicants that provide matching funds from a source or sources other than impact fees on residential development shall receive a priority for funding.~~
~~(2)The department shall set aside funding for new trusts, as defined by the department in the guidelines adopted pursuant to this section.~~
~~(b)Housing trusts eligible for funding under this section shall have the following characteristics:~~
(1)Utilization of a public or joint public and private fund established by legislation, ordinance, resolution, or a public-private partnership to receive specific revenue to address local housing needs.
~~(2)Receipt of ongoing revenues from dedicated sources of funding such as taxes, fees, loan repayments, or public or private contributions.~~
(c)The minimum allocation to an applicant that is a newly established trust shall be five hundred thousand dollars ($500,000), or a higher amount as established by the department. The minimum allocation for all other trusts shall be one million dollars ($1,000,000), or a higher amount as established by the department. All funds provided pursuant to this section shall be matched on a dollar-for-dollar basis with moneys that are not required by any state or federal law to be spent on housing, except as authorized by Chapter 2.5 (commencing with Section 50470), if those funds are used to capitalize a regional housing trust fund. An application for an existing housing trust shall not be considered unless the department has received adequate documentation of the deposit in the local housing trust fund of the local match, or evidence of a legally binding commitment to deposit matching funds, and the identity of the source of matching funds. An application for a new trust shall not be considered unless the department has received adequate documentation, as determined by the department, that an ordinance imposing or dedicating a tax or fee to be deposited into the new trust has been enacted or the applicant has received a legally binding commitment to deposit matching funds into the new trust. Funds shall not be disbursed by the department to any trust until all matching funds are on deposit and then funds may be disbursed only in amounts necessary to fund projects identified to receive a loan from the trust within a reasonable period of time, as determined by the department. Applicants shall be required to continue funding the local housing trust fund from these identified local sources, and continue the trust in operation, for a period of no less than five years from the date of award. If the funding is not continued for a five-year period, then (1) the amount of the department’s grant to the local housing trust fund, to the extent that the trust fund has unencumbered funds available, shall be immediately repaid, and (2) any payments from any projects funded by the local housing trust fund that would have been paid to the local housing trust fund shall be paid instead to the department and used for the program or its successor. The total amount paid to the department pursuant to (1) and (2), combined, shall not exceed the amount of the department’s grant.
~~(d)(1)Funds shall be used for the predevelopment costs, acquisition, construction, or rehabilitation of the following types of housing or projects:~~
~~(A)Rental housing projects or units within rental housing projects. The affordability of all assisted units shall be restricted for not less than 55 years.~~
~~(B)Emergency shelters, transitional housing, and permanent supportive housing, as these terms are defined in the guidelines adopted pursuant to this section.~~
~~(C)For-sale housing projects or units within for-sale housing projects.~~
(D)Notwithstanding any other provision of this chapter, the department may use funds appropriated pursuant to this chapter to make grants to trust funds for the construction of accessory dwelling units as defined in Section 65852.2 of the Government Code, or junior accessory dwelling units as defined in Section 65852.22 of the Government Code, and to repair, reconstruct, or rehabilitate, in whole or in part, accessory dwelling units and junior accessory dwelling units.
(2)At least 30 percent of the total amount of the grant and the match shall be expended on projects, units, or shelters that are affordable to, and restricted for, extremely low income households, as defined in Section 50106. No more than 20 percent of the total amount of the grant and the match shall be expended on projects or units affordable to, and restricted for, moderate-income persons and families whose income does not exceed 120 percent of the area median income. The remaining funds shall be used for projects, units, or shelters that are affordable to, and restricted for, lower income households, as defined in Section 50079.5.
(3)If funds are used for the acquisition, construction, or rehabilitation of for-sale housing projects or units within for-sale housing projects, the grantee shall record a deed restriction against the property that will ensure compliance with one of the following requirements upon resale of the for-sale housing units, unless it is in conflict with the requirements of another public funding source or law:
(A)If the property is sold within 30 years from the date that trust funds are used to acquire, construct, or rehabilitate the property, the owner or subsequent owner shall sell the home at an affordable housing cost, as defined in Section 50052.5, to a household that meets the relevant income qualifications.
(B)The owner and grantee shall share the equity in the unit pursuant to an equity-sharing agreement. The grantee shall reuse the proceeds of the equity-sharing agreement consistent with this section. To the extent not in conflict with another public funding source or law, all of the following shall apply to the equity-sharing agreement provided for by the deed restriction:
(i)Upon resale by an owner-occupant of the home, the owner-occupant of the home shall retain the market value of any improvements, the downpayment, and their proportionate share of appreciation. The grantee shall recapture any initial subsidy and its proportionate share of appreciation, which shall then be used to make housing available to persons and families of the same income category as the original grant and for any type of housing or shelter specified in paragraph (1).
(ii)For purposes of this subdivision, the initial subsidy shall be equal to the fair market value of the home at the time of initial sale to the owner-occupant minus the initial sale price to the owner-occupant, plus the amount of any downpayment assistance or mortgage assistance. If upon resale by the owner-occupant the market value is lower than the initial market value, then the value at the time of the resale shall be used as the initial market value.
(iii)For purposes of this subdivision, the grantee’s proportionate share of appreciation shall be equal to the ratio of the initial subsidy to the fair market value of the home at the time of the initial sale.
(4)Notwithstanding subparagraph (A) of paragraph (1) or paragraph (3), a local housing trust fund shall not be required to record a separate deed restriction or equity agreement for any project or home that it finances, if a restriction or agreement that meets the requirements of subparagraph (A) of paragraph (1) or paragraph (3), as applicable, has been, or will be, recorded against the property by another public agency.
(e)Loan repayments shall accrue to the grantee housing trust for use pursuant to this section. If the trust no longer exists, loan repayments shall accrue to the department for use in the program or its successor.
~~(f)(1)In order for a city, county, or city and county to be eligible for funding, the applicant shall, at the time of application, meet both of the following requirements:~~
(A)Have an adopted housing element that the department has determined, pursuant to Section 65585 of the Government Code, is in substantial compliance with the requirements of Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code.
(B)Have submitted to the department the annual progress report required by Section 65400 of the Government Code within the preceding 12 months, if the department has adopted the forms and definitions pursuant to subparagraph (B) of paragraph (2) of subdivision (a) of Section 65400 of the Government Code.
(2)In order for a nonprofit organization applicant to be eligible for funding, the applicant shall agree to utilize funds provided under this chapter only for projects located in cities, counties, or a city and county that meet both of the following requirements:
(A)Have an adopted housing element that the department has determined, pursuant to Section 65585 of the Government Code, to be in substantial compliance with the requirements of Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code.
(B)Have submitted to the department the annual progress report required by Section 65400 of the Government Code within the preceding 12 months, if the department has adopted the forms and definitions pursuant to subparagraph (B) of paragraph (2) of subdivision (a) of Section 65400 of the Government Code.
(3)A city, county, or city and county that has received an award pursuant to this section shall not encumber any program funds unless it has an adopted housing element the department has determined, pursuant to Section 65585 of the Government Code, is in substantial compliance with the requirements of Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code.
(g)Recipients shall have held, or shall agree to hold, a public hearing or hearings to discuss and describe the project or projects that will be financed with funds provided pursuant to this section. As a condition of receiving a grant pursuant to this section, any nonprofit organization shall agree that it will hold one public meeting a year to discuss the criteria that will be used to select projects to be funded. That meeting shall be open to the public, and public notice of this meeting shall be provided, except to the extent that any similar meeting of a city or county would be permitted to be held in closed session.
(h)No more than 5 percent of the funds appropriated to the department for the purposes of this program shall be used to pay the department’s costs of administration of this section. Notwithstanding any other law, the department may also allow a grantee to use up to 5 percent of the grant award for administrative costs.
(i)A local housing trust fund shall encumber funds provided pursuant to this section no later than 60 months after receipt. In addition, any award to a local housing trust that was under contract on January 1, 2013, shall be extended by 12 months, subject to progress benchmarks to be established by the department. Any funds not encumbered within that period shall revert to the department for use in the program or its successor.
(j)Recipients shall be required to file periodic reports with the department regarding the use of funds provided pursuant to this section. No later than December 31 of each year in which funds are awarded by the program, the department shall provide a report to the Legislature regarding the number of trust funds created, a description of the projects supported, the number of units assisted, and the amount of matching funds received.
SEC. 19.Section 53545.13 of the Health and Safety Code is amended to read:
53545.13.
~~(a)The Infill Incentive Grant Program of 2007 is hereby established to be administered by the department.~~
(b)Upon appropriation of funds by the Legislature for the purpose of implementing paragraph (1) of subdivision (b) of Section 53545, the department shall establish and administer a competitive grant program to allocate those funds to selected capital improvement projects that are an integral part of, or necessary to facilitate the development of, a qualifying infill project or a qualifying infill area.
~~(c)A qualifying infill project or qualifying infill area for which a capital improvement project grant may be awarded shall meet all of the following conditions:~~
(1)Be located in a city, county, or city and county, in which the general plan of the city, county, or city and county, has an adopted housing element that has been found by the department, pursuant to Section 65585 of the Government Code, to be in compliance with the requirements of Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code.
~~(2)Include not less than 15 percent of affordable units, as follows:~~
~~(A)For projects that contain both rental and ownership units, units of either or both product types may be included in the calculation of the affordability criteria.~~
(B)(i)To the extent included in a project grant application, for the purpose of calculating the percentage of affordable units, the department may consider the entire master development in which the development seeking grant funding is included.
(ii)Where applicable, an applicant may include a replacement housing plan to ensure that dwelling units housing persons and families of low or moderate income are not removed from the low- and moderate-income housing market. Residential units to be replaced may not be counted toward meeting the affordability threshold required for eligibility for funding under this section.
(C)For the purposes of this subdivision, “affordable unit” means a unit that is made available at an affordable rent, as defined in Section 50053, to a household earning no more than 60 percent of the area median income or at an affordable housing cost, as defined in Section 50052.5, to a household earning no more than 120 percent of the area median income. Rental units shall be subject to a recorded covenant that ensures affordability for at least 55 years. Ownership units shall initially be sold to and occupied by a qualified household, and subject to a recorded covenant that includes either a resale restriction for at least 30 years or equity sharing upon resale.
(D)A qualifying infill project or qualifying infill area for which a disposition and development agreement or other project- or area-specific agreement between the developer and the local agency having jurisdiction over the project has been executed on or before the effective date of the act adding this section, shall be deemed to meet the affordability requirement of this paragraph (2) if the agreement includes affordability covenants that subject the project or area to the production of affordable units for very low, low-, or moderate-income households.
(3)Include average residential densities on the parcels to be developed that are equal to or greater than the densities described in subparagraph (B) of paragraph (3) of subdivision (c) of Section 65583.2 of the Government Code, except that a project located in a rural area as defined in Section 50199.21 shall include average residential densities on the parcels to be developed of at least 10 units per acre.
~~(4)Be located in an area designated for mixed-use or residential development pursuant to one of the following adopted plans:~~
~~(A)A general plan adopted pursuant to Section 65300 of the Government Code.~~
~~(B)A project area redevelopment plan approved pursuant to Section 33330.~~
(C)A regional blueprint plan as defined in the California Regional Blueprint Planning Program administered by the Business, Transportation and Housing Agency, or a regional plan as defined in Section 65060.7 of the Government Code.
~~(5)For qualifying infill projects or qualifying infill areas located in a redevelopment project area, meet the requirements contained in subdivision (a) of Section 33413.~~
(d)In its review and ranking of applications for the award of capital improvement project grants, the department shall rank the affected qualifying infill projects and qualifying infill areas based on the following priorities:
~~(1)Project readiness, which shall include all of the following:~~
(A)A demonstration that the project or area development can complete environmental review and secure necessary entitlements from the local jurisdiction within a reasonable period of time following the submittal of a grant application.
(B)A demonstration that the eligible applicant can secure sufficient funding commitments derived from sources other than this part for the timely development of a qualifying infill project or development of a qualifying infill area.
~~(C)A demonstration that the project or area development has sufficient local support to achieve the proposed improvement.~~
~~(2)The depth and duration of the affordability of the housing proposed for a qualifying infill project or qualifying infill area.~~
~~(3)The extent to which the average residential densities on the parcels to be developed exceed the density standards contained in paragraph (3) of subdivision (c).~~
~~(4)The qualifying infill project’s or qualifying infill area’s inclusion of, or proximity or accessibility to, a transit station or major transit stop.~~
~~(5)The proximity of housing to parks, employment or retail centers, schools, or social services.~~
~~(6)The qualifying infill project or qualifying infill area location’s consistency with an adopted regional blueprint plan or other adopted regional growth plan intended to foster efficient land use.~~
~~(e)In allocating funds pursuant to this section, the department, to the maximum extent feasible, shall ensure a reasonable geographic distribution of funds.~~
~~(f)Funds awarded pursuant to this section shall supplement, not supplant, other available funding.~~
(g)(1)The department shall adopt guidelines for the operation of the grant program, including guidelines to ensure the tax-exempt status of the bonds issued pursuant to this part, and may administer the program under those guidelines.
(2)The guidelines shall include provisions for the reversion of grant awards that are not encumbered within four years of the fiscal year in which an award was made, and for the recapture of grants awarded, but for which development of the related housing units has not progressed in a reasonable period of time from the date of the grant award, as determined by the department.
~~(3)The guidelines shall not be subject to the requirements of Chapter 3.5 (commencing with Section 11340) of Division 3 of Title 2 of the Government Code.~~
(h)For each fiscal year within the duration of the grant program, the department shall include within the report to the Legislature, required by Section 50408, information on its activities relating to the grant program. The report shall include, but is not limited to, the following information:
~~(1)A summary of the projects that received grants under the program for each fiscal year that grants were awarded.~~
~~(2)The description, location, and estimated date of completion for each project that received a grant award under the program.~~
~~(3)An update on the status of each project that received a grant award under the program, and the number of housing units created or facilitated by the program.~~
(i) Notwithstanding paragraph (3) of subdivision (c), a city of greater than 100,000 in population in a standard metropolitan statistical area of less than 2,000,000 in population may petition the department for, and the department may grant, an exception to the jurisdiction’s classification pursuant to subdivisions (d) to (f), inclusive, of Section 65583.2 of the Government Code, if the city believes it is unable to meet the density requirements specified in paragraph (3) of subdivision (c). The city shall submit the petition with its application and shall include the reasons why the city believes the exception is warranted. The city shall provide information supporting the need for the exception, including, but not limited to, any limitations that the city may encounter in meeting the density requirements specified in paragraph (3) of subdivision (c). Any exception shall be for the purposes of this section only. This subdivision shall become inoperative on January 1, 2015.
(j)For notices of funding availability released after July 1, 2021, in awarding funds under the program, the department shall provide additional points or preference to projects located in jurisdictions that have adopted a housing element that has been found by the department to be in substantial compliance with the requirements of Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code pursuant to Section 65585 of the Government Code and that are designated prohousing pursuant to subdivision (c) of Section 65589.9 of the Government Code, in the manner determined by the department pursuant to subdivision (d) of Section 65589.9 of the Government Code.
SEC. 20.Part 12.5 (commencing with Section 53559) is added to Division 31 of the Health and Safety Code, to read:
12.5.Infill Infrastructure Grant Program of 2019
53559.
~~(a)The Infill Infrastructure Grant Program of 2019 is hereby established to be administered by the department.~~
(b)Upon appropriation by the Legislature of funds specified in Section 53559.2, the department shall establish and administer a grant program to allocate those funds to capital improvement projects that are an integral part of, or necessary to facilitate the development of, a qualifying infill project or qualifying infill area, pursuant to the requirements of this section.
(c)(1)The department shall administer a competitive application process for grants funded by the allocation specified in paragraph (1) of subdivision (a) of Section 53559.2 for selected capital improvement projects for large jurisdictions pursuant to this subdivision. The department shall release a notice of funding availability no later than November 30, 2019.
(2)In its review and ranking of applications for the award of capital improvement project grants, the department shall rank the affected qualifying infill projects and qualifying infill areas based on the following priorities:
~~(A)Project readiness, which shall include all of the following:~~
(i)A demonstration that the project or area development can complete environmental review and secure necessary entitlements from the local jurisdiction within a reasonable period of time following the submission of a grant application.
(ii)A demonstration that the eligible applicant can secure sufficient funding commitments derived from sources other than this part for the timely development of a qualifying infill project or development of a qualifying infill area.
~~(iii)A demonstration that the project or area development has sufficient local support to achieve the proposed improvement.~~
~~(B)The depth and duration of the affordability of the housing proposed for a qualifying infill project or qualifying infill area.~~
~~(C)The extent to which the average residential densities on the parcels to be developed exceed the density standards contained in paragraph (4) of subdivision (e).~~
~~(D)The qualifying infill project’s or qualifying infill area’s inclusion of, or proximity or accessibility to, a transit station or major transit stop.~~
~~(E)The proximity of housing to parks, employment or retail centers, schools, or social services.~~
(F)The qualifying infill project or qualifying infill area location’s consistency with an adopted sustainable communities strategy pursuant to Section 65080 of the Government Code, alternative planning strategy pursuant to Section 65450 of the Government Code, or other adopted regional growth plan intended to foster efficient land use.
~~(3)In allocating funds pursuant to this subdivision, the department, to the maximum extent feasible, shall ensure a reasonable geographic distribution of funds.~~
~~(4)For purposes of awarding grants pursuant to the competitive application process required by this subdivision:~~
(A)“Qualifying infill area” means a contiguous area located within an urbanized area (i) that has been previously developed, or where at least 75 percent of the perimeter of the area adjoins parcels that are developed with urban uses, and (ii) in which at least one development application has been approved or is pending approval for a residential or mixed-use residential project that meets the definition and criteria in this section for a qualifying infill project.
(B)(i)“Qualifying infill project” means a residential or mixed-use residential project located within an urbanized area on a site that has been previously developed, or on a vacant site where at least 75 percent of the perimeter of the site adjoins parcels that are developed with urban uses.
~~(ii)A property is adjoining the side of a project site if the property is separated from the project site only by an improved public right-of-way.~~
(d)(1)The department shall administer an over-the-counter application process for grants funded by the allocation specified in paragraph (2) of subdivision (a) of Section 53559.2 for capital improvement projects for small jurisdictions, pursuant to this subdivision. A notice of funding availability shall be released no later than November 30, 2019.
~~(2)Eligible applicants shall submit the following information in the application request for funding:~~
~~(A)A complete description of the qualifying infill project or qualifying infill area and documentation of how the infill project or infill area meets the requirements of this section.~~
(B)A complete description of the capital improvement project and requested grant funding for the project, how the project is necessary to support the development of housing, and how it meets the criteria of this section.
~~(C)Documentation that specifies how the application meets all of the requirements of subdivision (e).~~
~~(D)(i)Except as provided in clause (ii), a financial document that shows the gap financing needed for the project.~~
(ii)For a qualifying infill project located in the unincorporated area of the county, the department shall allow an applicant to meet the requirement described in clause (i) by submitting copies of an application or applications for other sources of state or federal funding for a qualifying infill project.
~~(E)(i)Except as provided by clause (ii), documentation of all necessary entitlement and permits, and a certification from the applicant that the project is shovel-ready.~~
(ii)For a qualifying infill project located in the unincorporated area of the county, the department shall allow the applicant to meet the requirement described in clause (i) by submitting a letter of intent from a willing affordable housing developer that has previously completed at least one comparable housing project, certifying that the developer is willing to submit an application to the county for approval by the county of a qualifying infill project within the area in the event that the funding requested pursuant to this subdivision is awarded.
~~(3)The department may establish a per-unit formula to determine the amount of funds awarded pursuant to this subdivision.~~
~~(4)For purposes of awarding grants pursuant to the over-the-counter application process required by this subdivision:~~
~~(A)“Qualifying infill area” means a contiguous area located within an urbanized area that meets either of the following criteria:~~
(i)The area contains sites included on the inventory of land suitable and available for residential development in the housing element of the applicable city or county general plan pursuant to paragraph (3) of subdivision (a) of Section 65583 of the Government Code, and at least 50 percent of the perimeter of the area shall adjoin parcels that are developed with urban uses.
(ii)The capital improvement project for which funding is requested is necessary, as documented by an environmental review or some other adopted planning document, to make the area suitable and available for residential development, or to allow the area to accommodate housing for additional income levels, and the area otherwise meets the requirements for inclusion on the inventory of land suitable and available for residential development in the housing element of the applicable city or county general plan pursuant to paragraph (3) of subdivision (a) of Section 65583 of the Government code. At least 50 percent of the perimeter of the area shall adjoin parcels that are developed with urban uses.
(B)“Qualifying infill project” means a residential or mixed-use residential project located within an urbanized area on a site that has been previously developed, or on a vacant site where at least 50 percent of the perimeter of the site adjoins parcels that are developed with urban uses.
(e)A qualifying infill project or qualifying infill area for which a capital improvement project grant may be awarded pursuant to either subdivision (c) or (d) shall meet all of the following conditions:
(1)Be located in a city, county, or city and county in which the general plan of the city, county, or city and county has an adopted housing element that has been found by the department, pursuant to Section 65585 of the Government Code, to be in compliance with the requirements of Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code.
~~(2)Be located in a city, county, or city and county that, at the time of application, has submitted its annual progress reports for 2017 through the most recently required annual progress reports.~~
~~(3)Include not less than 15 percent of affordable units, as follows:~~
~~(A)For projects that contain both rental and ownership units, units of either or both product types may be included in the calculation of the affordability criteria.~~
(B)(i)To the extent included in a project grant application, for the purpose of calculating the percentage of affordable units, the department may consider the entire master development in which the development seeking grant funding is included.
(ii)Where applicable, an applicant may include a replacement housing plan to ensure that dwelling units housing persons and families of low or moderate income are not removed from the low- and moderate-income housing market. Residential units to be replaced shall not be counted toward meeting the affordability threshold required for eligibility for funding under this section.
(C)For the purposes of this subdivision, “affordable unit” means a unit that is made available at an affordable rent, as defined in Section 50053, to a household earning no more than 60 percent of the area median income or at an affordable housing cost, as defined in Section 50052.5, to a household earning no more than 120 percent of the area median income. Rental units shall be subject to a recorded covenant that ensures affordability for at least 55 years. Ownership units shall initially be sold to and occupied by a qualified household, and shall be subject to a recorded covenant that includes either a resale restriction for at least 30 years or equity sharing upon resale.
(D)A qualifying infill project or qualifying infill area for which a disposition and development agreement or other project- or area-specific agreement between the developer and the local agency having jurisdiction over the project has been executed on or before the effective date of the act adding this section, shall be deemed to meet the affordability requirements of this paragraph if the agreement includes affordability covenants that subject the project or area to the production of affordable units for very low, low-, or moderate-income households.
(4)Include average residential densities on the parcels to be developed that are equal to or greater than the densities described in subparagraph (B) of paragraph (3) of subdivision (c) of Section 65583.2 of the Government Code, except that a project located in a rural area as defined in Section 50199.21 shall include average residential densities on the parcels to be developed of at least 10 units per acre.
~~(5)Be located in an area designated for mixed-use or residential development pursuant to one of the following:~~
~~(A)A general plan adopted pursuant to Section 65300 of the Government Code.~~
~~(B)A sustainable communities strategy adopted pursuant to Section 65080 of the Government Code.~~
~~(C)A specific plan adopted pursuant to Section 65450 of the Government Code.~~
~~(D)A Workforce Housing Opportunity Zone established pursuant to Section 65620 of the Government Code.~~
~~(E)A Housing Sustainability District established pursuant to Section 66201 of the Government Code.~~
~~(f)Funds awarded pursuant to this section shall supplement, not supplant, other available funding.~~
(g)The department shall adopt guidelines for the operation of the grant program. The guidelines shall include provisions for the reversion of grant awards that are not encumbered within two years of the date an award was made, and for the recapture of grants awarded, but for which development of the related housing units has not progressed in a reasonable period of time from the date of the grant award, as determined by the department. 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.
(h)For each fiscal year within the duration of the grant program, the department shall include within the report to the Governor and the Legislature, required by Section 50408, information on its activities relating to the grant program. The report shall include, but is not limited to, the following information:
~~(1)A summary of the projects that received grants under the program for each fiscal year that grants were awarded.~~
~~(2)The description, location, and estimated date of completion for each project that received a grant award under the program.~~
~~(3)An update on the status of each project that received a grant award under the program, and the number of housing units created or facilitated by the program.~~
(i)Notwithstanding paragraph (4) of subdivision (e), a city with a population greater than 100,000 in a standard metropolitan statistical area or a population of less than 2,000,000 may petition the department for, and the department may grant, an exception to the jurisdiction’s classification pursuant to subdivisions (d) to (f), inclusive, of Section 65583.2 of the Government Code, if the city believes it is unable to meet the density requirements specified in paragraph (4) of subdivision (e). The city shall submit the petition with its application and shall include the reasons why the city believes the exception is warranted. The city shall provide information supporting the need for the exception, including, but not limited to, any limitations that the city may encounter in meeting the density requirements specified in paragraph (4) of subdivision (e). Any exception shall be for the purposes of this section only. This subdivision shall become inoperative on January 1, 2023.
53559.1.
~~For the purposes of this part, the following definitions apply:~~
(a)“Capital improvement project” means the construction, rehabilitation, demolition, relocation, preservation, acquisition, or other physical improvement of a capital asset, as defined in subdivision (a) of Section 16727 of the Government Code, that is an integral part of, or necessary to facilitate the development of, a qualifying infill project or qualifying infill area. Capital improvement projects that may be funded under the grant program established by this part include, but are not limited to, those related to the following:
~~(1)Water, sewer, or other utility service improvements.~~
(2)Streets, roads, or transit linkages or facilities, including, but not limited to, related access plazas or pathways, bus or transit shelters, or facilities that support pedestrian or bicycle transit.
~~(3)Qualifying infill project or qualifying infill area site preparation or demolition.~~
~~(4)Sidewalk or streetscape improvements, including, but not limited, the reconstruction or resurfacing of sidewalks and streets or the installation of lighting, signage, or other related amenities.~~
~~(b)“Eligible applicant” means either of the following:~~
~~(1)A city, county, city and county, or public housing authority that has jurisdiction over a qualifying infill area.~~
(2)A nonprofit or for-profit developer of a qualifying infill project applying jointly with a city, county, city and county, or public housing authority that has jurisdiction over a qualifying infill area.
~~(c)“Small jurisdiction” means a county with a population of less than 250,000 as of January 1, 2019, or any city within that county.~~
~~(d)“Large jurisdiction” means a county that is not a small jurisdiction, or any city within that county.~~
(e)“Urbanized area” means an incorporated city or an urbanized area or urban cluster as defined by the United States Census Bureau. For unincorporated areas outside of an urban area or urban cluster, the area must be within a designated urban service area that is designated in the local general plan for urban development and is served by the public sewer and water.
~~(f)“Urban uses” means any residential, commercial, industrial, public institutional, transit or transportation passenger facility, or retail use, or any combination of those uses.~~
53599.2.
~~(a)Upon appropriation by the Legislature, the department may expend the sum of five hundred million dollars ($500,000,000) for the Infill Infrastructure Grant Program of 2019, as follows:~~
~~(1)Four hundred ten million dollars ($410,000,000) shall be allocated to fund grants pursuant to subdivision (c) of Section 53599.~~
~~(2)Ninety million dollars ($90,000,000) shall be allocated to fund grants pursuant subdivision (d) of Section 53599.~~
~~(b)Of the amount appropriated in subdivision (a), 5 percent of the funds shall be set aside for program administration, including state operations expenditures and technical assistance.~~
SEC. 21.Section 75218.1 is added to the Public Resources Code, to read:
75218.1.
For notices of funding availability released after July 1, 2021, in awarding funds under the program, the council shall provide additional points or preference to jurisdictions that have adopted a housing element that has been found by the Department of Housing and Community Development to be in substantial compliance with the requirements of Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code pursuant to Section 65585 of the Government Code and that are designated prohousing pursuant to subdivision (c) of Section 65589.9 of the Government Code, in the manner determined by the Department of Housing and Community Development pursuant to subdivision (d) of Section 65589.9 of the Government Code.
SEC. 22.Section 75244 is added to the Public Resources Code, to read:
75244.
For notices of funding availability released after July 1, 2021, in awarding funds under the program, the council shall provide additional points or preference to jurisdictions that have adopted a housing element that has been found by the Department of Housing and Community Development to be in substantial compliance with the requirements of Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code pursuant to Section 65585 of the Government Code and that are designated prohousing pursuant to subdivision (c) of Section 65589.9 of the Government Code, in the manner determined by the Department of Housing and Community Development pursuant to subdivision (d) of Section 65589.9 of the Government Code.
SEC. 23.Section 12206 of the Revenue and Taxation Code is amended to read:
12206.
(a)(1)There shall be allowed as a credit against the “tax,” described by Section 12201, a state low-income housing tax credit in an amount equal to the amount determined in subdivision (c), computed in accordance with Section 42 of the Internal Revenue Code, relating to low-income housing credit, except as otherwise provided in this section.
(2)“Taxpayer,” for purposes of this section, means the sole owner in the case of a “C” corporation, the partners in the case of a partnership, and the shareholders in the case of an “S” corporation.
(3)“Housing sponsor,” for purposes of this section, means the sole owner in the case of a “C” corporation, the partnership in the case of a partnership, and the “S” corporation in the case of an “S” corporation.
(b)(1)The amount of the credit allocated to any housing sponsor shall be authorized by the California Tax Credit Allocation Committee, or any successor thereof, based on a project’s need for the credit for economic feasibility in accordance with the requirements of this section.
(A)Except for projects to provide farmworker housing, as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code, that are allocated credits solely under the set-aside described in subdivision (c) of Section 50199.20 of the Health and Safety Code, the low-income housing project shall be located in California and shall meet either of the following requirements:
(i)The project’s housing sponsor has been allocated by the California Tax Credit Allocation Committee a credit for federal income tax purposes under Section 42 of the Internal Revenue Code, relating to low-income housing credit.
(ii)It qualifies for a credit under Section 42(h)(4)(B) of the Internal Revenue Code, relating to special rule where 50 percent or more of building is financed with tax-exempt bonds subject to volume cap.
(B)The California Tax Credit Allocation Committee shall not require fees for the credit under this section in addition to those fees required for applications for the tax credit pursuant to Section 42 of the Internal Revenue Code, relating to low-income housing credit. The committee may require a fee if the application for the credit under this section is submitted in a calendar year after the year the application is submitted for the federal tax credit.
(C)(i)For a project that receives a preliminary reservation of the state low-income housing tax credit, allowed pursuant to subdivision (a), on or after January 1, 2009, the credit shall be allocated to the partners of a partnership owning the project in accordance with the partnership agreement, regardless of how the federal low-income housing tax credit with respect to the project is allocated to the partners, or whether the allocation of the credit under the terms of the agreement has substantial economic effect, within the meaning of Section 704(b) of the Internal Revenue Code, relating to determination of distributive share.
(ii)This subparagraph shall not apply to a project that receives a preliminary reservation of state low-income housing tax credits under the set-aside described in subdivision (c) of Section 50199.20 of the Health and Safety Code unless the project also receives a preliminary reservation of federal low-income housing tax credits.
~~(2)(A)The California Tax Credit Allocation Committee shall certify to the housing sponsor the amount of tax credit under this section allocated to the housing sponsor for each credit period.~~
~~(B)In the case of a partnership or an “S” corporation, the housing sponsor shall provide a copy of the California Tax Credit Allocation Committee certification to the taxpayer.~~
~~(C)(i)The taxpayer shall attach a copy of the certification to any return upon which a tax credit is claimed under this section.~~
(ii)In the case of a failure to attach a copy of the certification for the year to the return in which a tax credit is claimed under this section, no credit under this section shall be allowed for that year until a copy of that certification is provided.
~~(D)All elections made by the taxpayer pursuant to Section 42 of the Internal Revenue Code, relating to low-income housing credit, shall apply to this section.~~
(E)(i)Except as described in clause (ii) or (iii), for buildings located in designated difficult development areas (DDAs) or qualified census tracts (QCTs), as defined in Section 42(d)(5)(B) of the Internal Revenue Code, relating to increase in credit for buildings in high-cost areas, credits may be allocated under this section in the amounts prescribed in subdivision (c), provided that the amount of credit allocated under Section 42 of the Internal Revenue Code, relating to low-income housing credit, is computed on 100 percent of the qualified basis of the building.
(ii)Notwithstanding clause (i), the California Tax Credit Allocation Committee may allocate the credit for buildings located in DDAs or QCTs that are restricted to having 50 percent of the building’s occupants be special needs households, as defined in the California Code of Regulations by the California Tax Credit Allocation Committee, or receiving an allocation pursuant to subparagraph (B) of paragraph (1) of subdivision (g), even if the taxpayer receives federal credits pursuant to Section 42(d)(5)(B) of the Internal Revenue Code, relating to increase in credit for buildings in high-cost areas, provided that the credit allowed under this section shall not exceed 30 percent of the eligible basis of the building.
(iii)On and after January 1, 2018, notwithstanding clause (i), the California Tax Credit Allocation Committee may allocate the credit pursuant to paragraph (6) of subdivision (c) even if the taxpayer receives federal credits, pursuant to Section 42(d)(5)(B) of the Internal Revenue Code, relating to increase in credit for buildings in high-cost areas.
(F)(i)The California Tax Credit Allocation Committee may allocate a credit under this section in exchange for a credit allocated pursuant to Section 42(d)(5)(B) of the Internal Revenue Code, relating to increase in credit for buildings in high-cost areas, in amounts up to 30 percent of the eligible basis of a building if the credits allowed under Section 42 of the Internal Revenue Code, relating to low-income housing credit, are reduced by an equivalent amount.
~~(ii)An equivalent amount shall be determined by the California Tax Credit Allocation Committee based upon the relative amount required to produce an equivalent state tax credit to the taxpayer.~~
(c)Section 42(b) of the Internal Revenue Code, relating to applicable percentage: 70 percent present value credit for certain new buildings; 30 percent present value credit for certain other buildings, shall be modified as follows:
~~(1)In the case of any qualified low-income building that receives an allocation after 1989 and is a new building not federally subsidized, the term “applicable percentage” means the following:~~
(A)For each of the first three years, the percentage prescribed by the Secretary of the Treasury for new buildings that are not federally subsidized for the taxable year, determined in accordance with the requirements of Section 42(b)(2) of the Internal Revenue Code, relating to temporary minimum credit rate for nonfederally subsidized new buildings, in lieu of the percentage prescribed in Section 42(b)(1)(A) of the Internal Revenue Code.
~~(B)For the fourth year, the difference between 30 percent and the sum of the applicable percentages for the first three years.~~
(2)In the case of any qualified low-income building that is a new building and is federally subsidized and receiving an allocation pursuant to subparagraph (B) of paragraph (1) of subdivision (g), the term “applicable percentage” means for the first three years, 9 percent of the qualified basis of the building, and for the fourth year, 3 percent of the qualified basis of the building.
(3)In the case of any qualified low-income building that receives an allocation after 1989 pursuant to subparagraph (A) of paragraph (1) of subdivision (g) and that is a new building that is federally subsidized or that is an existing building that is “at risk of conversion,” the term “applicable percentage” means the following:
~~(A)For each of the first three years, the percentage prescribed by the Secretary of the Treasury for new buildings that are federally subsidized for the taxable year.~~
~~(B)For the fourth year, the difference between 13 percent and the sum of the applicable percentages for the first three years.~~
(4)In the case of any qualified low-income building that receives an allocation pursuant to subparagraph (A) of paragraph (1) of subdivision (g) that meets all of the requirements of subparagraphs (A) through (D), inclusive, the term “applicable percentage” means 30 percent for each of the first three years and 5 percent for the fourth year. A qualified low-income building receiving an allocation under this paragraph is ineligible to also receive an allocation under paragraph (3).
~~(A)The qualified low-income building is at least 15 years old.~~
~~(B)The qualified low-income building is either:~~
(i)Serving households of very low income or extremely low income such that the average maximum household income as restricted, pursuant to an existing regulatory agreement with a federal, state, county, local, or other governmental agency, is not more than 45 percent of the area median gross income, as determined under Section 42 of the Internal Revenue Code, relating to low-income housing credit, adjusted by household size, and a tax credit regulatory agreement is entered into for a period of not less than 55 years restricting the average targeted household income to no more than 45 percent of the area median income.
~~(ii)Financed under Section 514 or 521 of the National Housing Act of 1949 (42 U.S.C. Sec. 1485).~~
~~(C)The qualified low-income building would have insufficient credits under paragraphs (2) and (3) to complete substantial rehabilitation due to a low appraised value.~~
~~(D)The qualified low-income building will complete the substantial rehabilitation in connection with the credit allocation herein.~~
~~(5)For purposes of this section, the term “at risk of conversion,” with respect to an existing property means a property that satisfies all of the following criteria:~~
~~(A)The property is a multifamily rental housing development in which at least 50 percent of the units receive governmental assistance pursuant to any of the following:~~
(i)New construction, substantial rehabilitation, moderate rehabilitation, property disposition, and loan management set-aside programs, or any other program providing project-based assistance pursuant to Section 8 of the United States Housing Act of 1937, Section 1437f of Title 42 of the United States Code, as amended.
~~(ii)The Below-Market-Interest-Rate Program pursuant to Section 221(d)(3) of the National Housing Act, Sections 1715l(d)(3) and (5) of Title 12 of the United States Code.~~
~~(iii)Section 236 of the National Housing Act, Section 1715z-1 of Title 12 of the United States Code.~~
~~(iv)Programs for rent supplement assistance pursuant to Section 101 of the Housing and Urban Development Act of 1965, Section 1701s of Title 12 of the United States Code, as amended.~~
(v)Programs pursuant to Section 514 of the Housing Act of 1949, Section 1484 of Title 42 of the United States Code, as amended, and Section 515 of the Housing Act of 1949, Section 1485 of Title 42 of the United States Code, as amended.
~~(vi)The low-income housing credit program set forth in Section 42 of the Internal Revenue Code, relating to low-income housing credit.~~
~~(vii)Programs for loans or grants administered by the Department of Housing and Community Development.~~
(B)The restrictions on rent and income levels will terminate or the federally insured mortgage or rent subsidy contract on the property is eligible for prepayment or termination any time within five years before or after the date of application to the California Tax Credit Allocation Committee.
(C)The entity acquiring the property enters into a regulatory agreement that requires the property to be operated in accordance with the requirements of this section for a period equal to the greater of 55 years or the life of the property.
(D)The property satisfies the requirements of Section 42(e) of the Internal Revenue Code, relating to rehabilitation expenditures treated as separate new building, except that the provisions of Section 42(e)(3)(A)(ii)(I) shall not apply.
(6)On and after January 1, 2018, in the case of any qualified low-income building that is (A) farmworker housing, as defined by paragraph (2) of subdivision (h) of Section 50199.7 of the Health and Safety Code, and (B) is federally subsidized, the term “applicable percentage” means for each of the first three years, 20 percent of the qualified basis of the building, and for the fourth year, 15 percent of the qualified basis of the building.
(d)The term “qualified low-income housing project” as defined in Section 42(c)(2) of the Internal Revenue Code, relating to qualified low-income building, is modified by adding the following requirements:
~~(1)The taxpayer shall be entitled to receive a cash distribution from the operations of the project, after funding required reserves, that, at the election of the taxpayer, is equal to:~~
~~(A)An amount not to exceed 8 percent of the lesser of:~~
~~(i)The owner equity that shall include the amount of the capital contributions actually paid to the housing sponsor and shall not include any amounts until they are paid on an investor note.~~
~~(ii)Twenty percent of the adjusted basis of the building as of the close of the first taxable year of the credit period.~~
(B)The amount of the cashflow from those units in the building that are not low-income units. For purposes of computing cashflow under this subparagraph, operating costs shall be allocated to the low-income units using the “floor space fraction,” as defined in Section 42 of the Internal Revenue Code, relating to low-income housing credit.
(C)Any amount allowed to be distributed under subparagraph (A) that is not available for distribution during the first five years of the compliance period may be accumulated and distributed any time during the first 15 years of the compliance period but not thereafter.
(2)The limitation on return shall apply in the aggregate to the partners if the housing sponsor is a partnership and in the aggregate to the shareholders if the housing sponsor is an “S” corporation.
(3)The housing sponsor shall apply any cash available for distribution in excess of the amount eligible to be distributed under paragraph (1) to reduce the rent on rent-restricted units or to increase the number of rent-restricted units subject to the tests of Section 42(g)(1) of the Internal Revenue Code, relating to in general.
~~(e)The provisions of Section 42(f) of the Internal Revenue Code, relating to definition and special rules relating to credit period, shall be modified as follows:~~
(1)The term “credit period” as defined in Section 42(f)(1) of the Internal Revenue Code, relating to credit period defined, is modified by substituting “four taxable years” for “10 taxable years.”
(2)The special rule for the first taxable year of the credit period under Section 42(f)(2) of the Internal Revenue Code, relating to special rule for 1st year of credit period, shall not apply to the tax credit under this section.
~~(3)Section 42(f)(3) of the Internal Revenue Code, relating to determination of applicable percentage with respect to increases in qualified basis after 1st year of credit period, is modified to read:~~
If, as of the close of any taxable year in the compliance period, after the first year of the credit period, the qualified basis of any building exceeds the qualified basis of that building as of the close of the first year of the credit period, the housing sponsor, to the extent of its tax credit allocation, shall be eligible for a credit on the excess in an amount equal to the applicable percentage determined pursuant to subdivision (c) for the four-year period beginning with the later of the taxable years in which the increase in qualified basis occurs.
~~(f)The provisions of Section 42(h) of the Internal Revenue Code, relating to limitation on aggregate credit allowable with respect to projects located in a state, shall be modified as follows:~~
(1)Section 42(h)(2) of the Internal Revenue Code, relating to allocated credit amount to apply to all taxable years ending during or after credit allocation year, does not apply and instead the following provisions apply:
The total amount for the four-year credit period of the housing credit dollars allocated in a calendar year to any building shall reduce the aggregate housing credit dollar amount of the California Tax Credit Allocation Committee for the calendar year in which the allocation is made.
(2)Paragraphs (3), (4), (5), (6)(E)(i)(II), (6)(F), (6)(G), (6)(I), (7), and (8) of Section 42(h) of the Internal Revenue Code, relating to limitation on aggregate credit allowable with respect to projects located in a state, do not apply to this section.
(g)The aggregate housing credit dollar amount that may be allocated annually by the California Tax Credit Allocation Committee pursuant to this section, Section 17058, and Section 23610.5 shall be an amount equal to the sum of all the following:
(1)(A)Seventy million dollars ($70,000,000) for the 2001 calendar year, and, for the 2002 calendar year and each calendar year thereafter, seventy million dollars ($70,000,000) increased by the percentage, if any, by which the Consumer Price Index for the preceding calendar year exceeds the Consumer Price Index for the 2001 calendar year. For the purposes of this paragraph, the term “Consumer Price Index” means the last Consumer Price Index for All Urban Consumers published by the federal Department of Labor.
(B)Five hundred million dollars ($500,000,000) for the 2020 calendar year, and up to five hundred million dollars ($500,000,000) for the 2021 calendar year and every year thereafter. Allocations shall only be available pursuant to this subparagraph in the 2021 calendar year and thereafter if the annual Budget Act, or if any bill providing for appropriations related to the Budget Act, specifies an amount to be available for allocation in that calendar year by the California Tax Credit Allocation Committee, and the California Tax Credit Allocation Committee has adopted regulatory reforms aimed at increasing production and containing costs. A housing sponsor receiving a nonfederally subsidized allocation under subdivision (c) shall not be eligible for receipt of the housing credit allocated from the increased amount under this subparagraph. A housing sponsor receiving a nonfederally subsidized allocation under subdivision (c) shall remain eligible for receipt of the housing credit allocated from the credit ceiling amount under subparagraph (A).
(i)Eligible projects for allocations under this subparagraph include any new building, as defined in Section 42(i)(4) of the Internal Revenue Code, relating to newly constructed buildings, and the regulations promulgated thereunder, excluding rehabilitation expenditures under Section 42(e) of the Internal Revenue Code, relating to rehabilitation expenditures treated as separate new building, and is federally subsidized.
(ii)Notwithstanding any other provision of this section, for allocations pursuant to this subparagraph for the 2020 calendar year, the California Tax Credit Allocation Committee shall consider projects located throughout the state and shall allocate housing credits, subject to the minimum federal requirements as set forth in Sections 42 and 142 of the Internal Revenue Code, the minimum requirements set forth in Sections 5033 and 5190 of the California Debt Limit Allocation Committee regulations, and the minimum set forth in Section 10326 of the Tax Credit Allocation Committee regulations, for projects that can begin construction within 180 days from award, subject to availability of funds.
(iii)Notwithstanding any other provision of this section, for allocations pursuant to this subparagraph for the 2021 calendar year and thereafter, the California Tax Credit Allocation Committee shall prescribe regulations, rules, guidelines, or procedures necessary to implement a new allocation methodology that is aimed at increasing production and containing costs.
(iv)Of the amount available pursuant to this subparagraph, and notwithstanding any other requirement of this section, the California Tax Credit Allocation Committee may allocate up to two hundred million dollars ($200,000,000) for housing financed by the California Housing Finance Agency under its Mixed-Income Program.
~~(2)The unused housing credit ceiling, if any, for the preceding calendar years.~~
(3)The amount of housing credit ceiling returned in the calendar year. For purposes of this paragraph, the amount of housing credit dollar amount returned in the calendar year equals the housing credit dollar amount previously allocated to any project that does not become a qualified low-income housing project within the period required by this section or to any project with respect to which an allocation is canceled by mutual consent of the California Tax Credit Allocation Committee and the allocation recipient.
~~(4)Five hundred thousand dollars ($500,000) per calendar year for projects to provide farmworker housing, as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code.~~
(5)The amount of any unallocated or returned credits under former Sections 17053.14, 23608.2, and 23608.3, as those sections read prior to January 1, 2009, until fully exhausted for projects to provide farmworker housing, as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code.
(h)The term “compliance period” as defined in Section 42(i)(1) of the Internal Revenue Code, relating to compliance period, is modified to mean, with respect to any building, the period of 30 consecutive taxable years beginning with the first taxable year of the credit period with respect thereto.
~~(i)(1)Section 42(j) of the Internal Revenue Code, relating to recapture of credit, shall not be applicable and the provisions in paragraph (2) shall be substituted in its place.~~
(2)The requirements of this section shall be set forth in a regulatory agreement between the California Tax Credit Allocation Committee and the housing sponsor, and the regulatory agreement shall be subordinated, when required, to any lien or encumbrance of any banks or other institutional lenders to the project. The regulatory agreement entered into pursuant to subdivision (f) of Section 50199.14 of the Health and Safety Code, shall apply, provided that the agreement includes all of the following provisions:
~~(A)A term not less than the compliance period.~~
~~(B)A requirement that the agreement be recorded in the official records of the county in which the qualified low-income housing project is located.~~
~~(C)A provision stating which state and local agencies can enforce the regulatory agreement in the event the housing sponsor fails to satisfy any of the requirements of this section.~~
(D)A provision that the regulatory agreement shall be deemed a contract enforceable by tenants as third-party beneficiaries thereto and that allows individuals, whether prospective, present, or former occupants of the building, who meet the income limitation applicable to the building, the right to enforce the regulatory agreement in any state court.
~~(E)A provision incorporating the requirements of Section 42 of the Internal Revenue Code, relating to low-income housing credit, as modified by this section.~~
(F)A requirement that the housing sponsor notify the California Tax Credit Allocation Committee or its designee and the local agency that can enforce the regulatory agreement if there is a determination by the Internal Revenue Service that the project is not in compliance with Section 42(g) of the Internal Revenue Code, relating to qualified low-income housing project.
(G)A requirement that the housing sponsor, as security for the performance of the housing sponsor’s obligations under the regulatory agreement, assign the housing sponsor’s interest in rents that it receives from the project, provided that until there is a default under the regulatory agreement, the housing sponsor is entitled to collect and retain the rents.
(H)A provision that the remedies available in the event of a default under the regulatory agreement that is not cured within a reasonable cure period include, but are not limited to, allowing any of the parties designated to enforce the regulatory agreement to collect all rents with respect to the project; taking possession of the project and operating the project in accordance with the regulatory agreement until the enforcer determines the housing sponsor is in a position to operate the project in accordance with the regulatory agreement; applying to any court for specific performance; securing the appointment of a receiver to operate the project; or any other relief as may be appropriate.
(j)(1)The committee shall allocate the housing credit on a regular basis consisting of two or more periods in each calendar year during which applications may be filed and considered. The committee shall establish application filing deadlines, the maximum percentage of federal and state low-income housing tax credit ceiling that may be allocated by the committee in that period, and the approximate date on which allocations shall be made. If the enactment of federal or state law, the adoption of rules or regulations, or other similar events prevent the use of two allocation periods, the committee may reduce the number of periods and adjust the filing deadlines, maximum percentage of credit allocated, and the allocation dates.
(2)The committee shall adopt a qualified allocation plan, as provided in Section 42(m)(1) of the Internal Revenue Code, relating to plans for allocation of credit among projects. In adopting this plan, the committee shall comply with the provisions of Sections 42(m)(1)(B) and 42(m)(1)(C) of the Internal Revenue Code, relating to qualified allocation plan and relating to certain selection criteria must be used, respectively.
(3)Notwithstanding Section 42(m) of the Internal Revenue Code, relating to responsibilities of housing credit agencies, the California Tax Credit Allocation Committee shall allocate housing credits in accordance with the qualified allocation plan and regulations, which shall include the following provisions:
(A)All housing sponsors, as defined by paragraph (3) of subdivision (a), shall demonstrate at the time the application is filed with the committee that the project meets the following threshold requirements:
~~(i)The housing sponsor shall demonstrate there is a need and demand for low-income housing in the community or region for which it is proposed.~~
(ii)The project’s proposed financing, including tax credit proceeds, shall be sufficient to complete the project and that the proposed operating income shall be adequate to operate the project for the extended use period.
~~(iii)The project shall have enforceable financing commitments, either construction or permanent financing, for at least 50 percent of the total estimated financing of the project.~~
~~(iv)The housing sponsor shall have and maintain control of the site for the project.~~
~~(v)The housing sponsor shall demonstrate that the project complies with all applicable local land use and zoning ordinances.~~
~~(vi)The housing sponsor shall demonstrate that the project development team has the experience and the financial capacity to ensure project completion and operation for the extended use period.~~
(vii)The housing sponsor shall demonstrate the amount of tax credit that is necessary for the financial feasibility of the project and its viability as a qualified low-income housing project throughout the extended use period, taking into account operating expenses, a supportable debt service, reserves, funds set aside for rental subsidies and required equity, and a development fee that does not exceed a specified percentage of the eligible basis of the project prior to inclusion of the development fee in the eligible basis, as determined by the committee.
~~(B)The committee shall give a preference to those projects satisfying all of the threshold requirements of subparagraph (A) if both of the following apply:~~
~~(i)The project serves the lowest income tenants at rents affordable to those tenants.~~
~~(ii)The project is obligated to serve qualified tenants for the longest period.~~
~~(C)In addition to the provisions of subparagraphs (A) and (B), the committee shall use the following criteria in allocating housing credits:~~
~~(i)Projects serving large families in which a substantial number, as defined by the committee, of all residential units are low-income units with three or more bedrooms.~~
~~(ii)Projects providing single-room occupancy units serving very low income tenants.~~
~~(iii)Existing projects that are “at risk of conversion,” as defined by paragraph (5) of subdivision (c).~~
(iv)Projects for which a public agency provides direct or indirect long-term financial support for at least 15 percent of the total project development costs or projects for which the owner’s equity constitutes at least 30 percent of the total project development costs.
~~(v)Projects that provide tenant amenities not generally available to residents of low-income housing projects.~~
~~(D)Subparagraphs (B) and (C) shall not apply to projects receiving an allocation pursuant to subparagraph (B) of paragraph (1) of subdivision (g).~~
(4)For purposes of allocating credits pursuant to this section, the committee shall not give preference to any project by virtue of the date of submission of its application except to break a tie when two or more of the projects have an equal rating.
~~(k)Section 42(l) of the Internal Revenue Code, relating to certifications and other reports to secretary, shall be modified as follows:~~
~~The term “secretary” shall be replaced by the term “Franchise Tax Board.”~~
(l)In the case in which the credit allowed under this section exceeds the “tax,” the excess may be carried over to reduce the “tax” in the following year, and succeeding years if necessary, until the credit has been exhausted.
~~(m)The provisions of Section 11407(a) of Public Law 101-508, relating to the effective date of the extension of the low-income housing credit, apply to calendar years after 1993.~~
~~(n)The provisions of Section 11407(c) of Public Law 101-508, relating to election to accelerate credit, shall not apply.~~
(o)(1)(A)For a project that receives a preliminary reservation under this section beginning on or after January 1, 2016, a taxpayer may elect in its application to the California Tax Credit Allocation Committee to sell all or any portion of any credit allowed under this section to one or more unrelated parties for each taxable year in which the credit is allowed, subject to subparagraphs (B) and (C). The taxpayer may, only once, revoke an election to sell pursuant to this subdivision at any time before the California Tax Credit Allocation Committee allocates a final credit amount for the project pursuant to this section, at which point the election shall become irrevocable.
~~(B)A credit that a taxpayer elects to sell all or a portion of pursuant to this subdivision shall be sold for consideration that is not less than 80 percent of the amount of the credit.~~
(C)A taxpayer shall not elect to sell all or any portion of any credit pursuant to this subdivision if the taxpayer did not make that election in its application submitted to the California Tax Credit Allocation Committee.
(2)(A)The taxpayer that originally received the credit shall report to the California Tax Credit Allocation Committee within 10 days of the sale of the credit, in the form and manner specified by the California Tax Credit Allocation Committee, all required information regarding the purchase and sale of the credit, including the social security or other taxpayer identification number of the unrelated party or parties to whom the credit has been sold, the face amount of the credit sold, and the amount of consideration received by the taxpayer for the sale of the credit.
(B)The California Tax Credit Allocation Committee shall provide an annual listing to the Franchise Tax Board, in a form and manner agreed upon by the California Tax Credit Allocation Committee and the Franchise Tax Board, of the taxpayers that have sold or purchased a credit pursuant to this subdivision.
~~(3)A credit may be sold pursuant to this subdivision to more than one unrelated party.~~
(4)Notwithstanding any other law, the taxpayer that originally received the credit that is sold pursuant to paragraph (1) shall remain solely liable for all obligations and liabilities imposed on the taxpayer by this section with respect to the credit, none of which shall apply to a party to whom the credit has been sold or subsequently transferred. Parties that purchase credits pursuant to paragraph (1) shall be entitled to utilize the purchased credits in the same manner in which the taxpayer that originally received the credit could utilize them.
(p)The California Tax Credit Allocation Committee may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the California Tax Credit Allocation Committee pursuant to this section.
~~(q)This section shall remain in effect for as long as Section 42 of the Internal Revenue Code, relating to low-income housing credit, remains in effect.~~
SEC. 24.Section 17058 of the Revenue and Taxation Code is amended to read:
17058.
(a)(1)There shall be allowed as a credit against the “net tax,” defined in Section 17039, a state low-income housing tax credit in an amount equal to the amount determined in subdivision (c), computed in accordance with Section 42 of the Internal Revenue Code, relating to low-income housing credit, except as otherwise provided in this section.
(2)“Taxpayer,” for purposes of this section, means the sole owner in the case of an individual, the partners in the case of a partnership, and the shareholders in the case of an “S” corporation.
(3)“Housing sponsor,” for purposes of this section, means the sole owner in the case of an individual, the partnership in the case of a partnership, and the “S” corporation in the case of an “S” corporation.
(b)(1)The amount of the credit allocated to any housing sponsor shall be authorized by the California Tax Credit Allocation Committee, or any successor thereof, based on a project’s need for the credit for economic feasibility in accordance with the requirements of this section.
~~(A)The low-income housing project shall be located in California and shall meet either of the following requirements:~~
(i)Except for projects to provide farmworker housing, as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code, that are allocated credits solely under the set-aside described in subdivision (c) of Section 50199.20 of the Health and Safety Code, the project’s housing sponsor has been allocated by the California Tax Credit Allocation Committee a credit for federal income tax purposes under Section 42 of the Internal Revenue Code, relating to low-income housing credit.
(ii)It qualifies for a credit under Section 42(h)(4)(B) of the Internal Revenue Code, relating to special rule where 50 percent or more of building is financed with tax-exempt bonds subject to volume cap.
(B)The California Tax Credit Allocation Committee shall not require fees for the credit under this section in addition to those fees required for applications for the tax credit pursuant to Section 42 of the Internal Revenue Code, relating to low-income housing credit. The committee may require a fee if the application for the credit under this section is submitted in a calendar year after the year the application is submitted for the federal tax credit.
(C)(i)For a project that receives a preliminary reservation of the state low-income housing tax credit, allowed pursuant to subdivision (a), on or after January 1, 2009, the credit shall be allocated to the partners of a partnership owning the project in accordance with the partnership agreement, regardless of how the federal low-income housing tax credit with respect to the project is allocated to the partners, or whether the allocation of the credit under the terms of the agreement has substantial economic effect, within the meaning of Section 704(b) of the Internal Revenue Code, relating to determination of distributive share.
(ii)To the extent the allocation of the credit to a partner under this section lacks substantial economic effect, any loss or deduction otherwise allowable under this part that is attributable to the sale or other disposition of that partner’s partnership interest made prior to the expiration of the federal credit shall not be allowed in the taxable year in which the sale or other disposition occurs, but shall instead be deferred until and treated as if it occurred in the first taxable year immediately following the taxable year in which the federal credit period expires for the project described in clause (i).
(iii)This subparagraph shall not apply to a project that receives a preliminary reservation of state low-income housing tax credits under the set-aside described in subdivision (c) of Section 50199.20 of the Health and Safety Code unless the project also receives a preliminary reservation of federal low-income housing tax credits.
~~(2)(A)The California Tax Credit Allocation Committee shall certify to the housing sponsor the amount of tax credit under this section allocated to the housing sponsor for each credit period.~~
~~(B)In the case of a partnership or an “S” corporation, the housing sponsor shall provide a copy of the California Tax Credit Allocation Committee certification to the taxpayer.~~
~~(C)The taxpayer shall, upon request, provide a copy of the certification to the Franchise Tax Board.~~
~~(D)All elections made by the taxpayer pursuant to Section 42 of the Internal Revenue Code, relating to low-income housing credit, apply to this section.~~
(E)(i)Except as described in clause (ii) or (iii), for buildings located in designated difficult development areas (DDAs) or qualified census tracts (QCTs), as defined in Section 42(d)(5)(B) of the Internal Revenue Code, relating to increase in credit for buildings in high-cost areas, credits may be allocated under this section in the amounts prescribed in subdivision (c), provided that the amount of credit allocated under Section 42 of the Internal Revenue Code, relating to low-income housing credit, is computed on 100 percent of the qualified basis of the building.
(ii)Notwithstanding clause (i), the California Tax Credit Allocation Committee may allocate the credit for buildings located in DDAs or QCTs that are restricted to having 50 percent of the building’s occupants be special needs households, as defined in the California Code of Regulations by the California Tax Credit Allocation Committee, or receiving an allocation pursuant to subparagraph (B) of paragraph (1) of subdivision (g), even if the taxpayer receives federal credits pursuant to Section 42(d)(5)(B) of the Internal Revenue Code, relating to increase in credit for buildings in high-cost areas, provided that the credit allowed under this section shall not exceed 30 percent of the eligible basis of the building.
(iii)On and after January 1, 2018, notwithstanding clause (i), the California Tax Credit Allocation Committee may allocate the credit pursuant to paragraph (7) of subdivision (c) even if the taxpayer receives federal credits, pursuant to Section 42(d)(5)(B) of the Internal Revenue Code, relating to increase in credit for buildings in high-cost areas.
(F)(i)The California Tax Credit Allocation Committee may allocate a credit under this section in exchange for a credit allocated pursuant to Section 42(d)(5)(B) of the Internal Revenue Code, relating to increase in credit for buildings in high-cost areas, in amounts up to 30 percent of the eligible basis of a building if the credits allowed under Section 42 of the Internal Revenue Code, relating to low-income housing credit, are reduced by an equivalent amount.
~~(ii)An equivalent amount shall be determined by the California Tax Credit Allocation Committee based upon the relative amount required to produce an equivalent state tax credit to the taxpayer.~~
(c)Section 42(b) of the Internal Revenue Code, relating to applicable percentage: 70 percent present value credit for certain new buildings; 30 percent present value credit for certain other buildings, shall be modified as follows:
(1)In the case of any qualified low-income building placed in service by the housing sponsor during 1987, the term “applicable percentage” means 9 percent for each of the first three years and 3 percent for the fourth year for new buildings (whether or not the building is federally subsidized) and for existing buildings.
~~(2)In the case of any qualified low-income building that receives an allocation after 1989 and is a new building not federally subsidized, the term “applicable percentage” means the following:~~
(A)For each of the first three years, the percentage prescribed by the Secretary of the Treasury for new buildings that are not federally subsidized for the taxable year, determined in accordance with the requirements of Section 42(b)(2) of the Internal Revenue Code, relating to temporary minimum credit rate for nonfederally subsidized new buildings, in lieu of the percentage prescribed in Section 42(b)(1)(A) of the Internal Revenue Code.
~~(B)For the fourth year, the difference between 30 percent and the sum of the applicable percentages for the first three years.~~
(3)In the case of any qualified low-income building that is a new building that is federally subsidized and receiving an allocation pursuant to subparagraph (B) of paragraph (1) of subdivision (g), the term “applicable percentage” means for the first three years, 9 percent of the qualified basis of the building, and for the fourth year, 3 percent of the qualified basis of the building.
(4)In the case of any qualified low-income building that receives an allocation after 1989 pursuant to subparagraph (A) of paragraph (1) of subdivision (g) and that is a new building that is federally subsidized or that is an existing building that is “at risk of conversion,” the term “applicable percentage” means the following:
~~(A)For each of the first three years, the percentage prescribed by the Secretary of the Treasury for new buildings that are federally subsidized for the taxable year.~~
~~(B)For the fourth year, the difference between 13 percent and the sum of the applicable percentages for the first three years.~~
(5)In the case of any qualified low-income building that receives an allocation pursuant to subparagraph (A) of paragraph (1) of subdivision (g) that meets all of the requirements of subparagraphs (A) through (D), inclusive, the term “applicable percentage” means 30 percent for each of the first three years and 5 percent for the fourth year. A qualified low-income building receiving an allocation under this paragraph is ineligible to also receive an allocation under paragraph (3).
~~(A)The qualified low-income building is at least 15 years old.~~
~~(B)The qualified low-income building is either:~~
(i)Serving households of very low income or extremely low income such that the average maximum household income as restricted, pursuant to an existing regulatory agreement with a federal, state, county, local, or other governmental agency, is not more than 45 percent of the area median gross income, as determined under Section 42 of the Internal Revenue Code, relating to low-income housing credit, adjusted by household size, and a tax credit regulatory agreement is entered into for a period of not less than 55 years restricting the average targeted household income to no more than 45 percent of the area median income.
~~(ii)Financed under Section 514 or 521 of the National Housing Act of 1949 (42 U.S.C. Sec. 1485).~~
~~(C)The qualified low-income building would have insufficient credits under paragraphs (2) and (3) to complete substantial rehabilitation due to a low appraised value.~~
~~(D)The qualified low-income building will complete the substantial rehabilitation in connection with the credit allocation herein.~~
~~(6)For purposes of this section, the term “at risk of conversion,” with respect to an existing property means a property that satisfies all of the following criteria:~~
~~(A)The property is a multifamily rental housing development in which at least 50 percent of the units receive governmental assistance pursuant to any of the following:~~
(i)New construction, substantial rehabilitation, moderate rehabilitation, property disposition, and loan management set-aside programs, or any other program providing project-based assistance pursuant to Section 8 of the United States Housing Act of 1937, Section 1437f of Title 42 of the United States Code, as amended.
~~(ii)The Below-Market-Interest-Rate Program pursuant to Section 221(d)(3) of the National Housing Act, Sections 1715l(d)(3) and (5) of Title 12 of the United States Code.~~
~~(iii)Section 236 of the National Housing Act, Section 1715z-1 of Title 12 of the United States Code.~~
~~(iv)Programs for rent supplement assistance pursuant to Section 101 of the Housing and Urban Development Act of 1965, Section 1701s of Title 12 of the United States Code, as amended.~~
(v)Programs pursuant to Section 514 of the Housing Act of 1949, Section 1484 of Title 42 of the United States Code, as amended, and Section 515 of the Housing Act of 1949, Section 1485 of Title 42 of the United States Code, as amended.
~~(vi)The low-income housing credit program set forth in Section 42 of the Internal Revenue Code, relating to low-income housing credit.~~
~~(vii)Programs for loans or grants administered by the Department of Housing and Community Development.~~
(B)The restrictions on rent and income levels will terminate or the federally insured mortgage or rent subsidy contract on the property is eligible for prepayment or termination any time within five years before or after the date of application to the California Tax Credit Allocation Committee.
(C)The entity acquiring the property enters into a regulatory agreement that requires the property to be operated in accordance with the requirements of this section for a period equal to the greater of 55 years or the life of the property.
(D)The property satisfies the requirements of Section 42(e) of the Internal Revenue Code, relating to rehabilitation expenditures treated as separate new building, except that the provisions of Section 42(e)(3)(A)(ii)(I) shall not apply.
(7)On and after January 1, 2018, in the case of any qualified low-income building that is (A) farmworker housing, as defined by paragraph (2) of subdivision (h) of Section 50199.7 of the Health and Safety Code, and (B) is federally subsidized, the term “applicable percentage” means for each of the first three years, 20 percent of the qualified basis of the building, and for the fourth year, 15 percent of the qualified basis of the building.
(d)The term “qualified low-income housing project” as defined in Section 42(c)(2) of the Internal Revenue Code, relating to qualified low-income building, is modified by adding the following requirements:
~~(1)The taxpayer shall be entitled to receive a cash distribution from the operations of the project, after funding required reserves, that, at the election of the taxpayer, is equal to:~~
~~(A)An amount not to exceed 8 percent of the lesser of:~~
~~(i)The owner equity, which shall include the amount of the capital contributions actually paid to the housing sponsor and shall not include any amounts until they are paid on an investor note.~~
~~(ii)Twenty percent of the adjusted basis of the building as of the close of the first taxable year of the credit period.~~
(B)The amount of the cashflow from those units in the building that are not low-income units. For purposes of computing cashflow under this subparagraph, operating costs shall be allocated to the low-income units using the “floor space fraction,” as defined in Section 42 of the Internal Revenue Code, relating to low-income housing credit.
(C)Any amount allowed to be distributed under subparagraph (A) that is not available for distribution during the first five years of the compliance period may be accumulated and distributed any time during the first 15 years of the compliance period but not thereafter.
(2)The limitation on return shall apply in the aggregate to the partners if the housing sponsor is a partnership and in the aggregate to the shareholders if the housing sponsor is an “S” corporation.
(3)The housing sponsor shall apply any cash available for distribution in excess of the amount eligible to be distributed under paragraph (1) to reduce the rent on rent-restricted units or to increase the number of rent-restricted units subject to the tests of Section 42(g)(1) of the Internal Revenue Code, relating to in general.
~~(e)The provisions of Section 42(f) of the Internal Revenue Code, relating to definition and special rules relating to credit period, shall be modified as follows:~~
(1)The term “credit period” as defined in Section 42(f)(1) of the Internal Revenue Code, relating to credit period defined, is modified by substituting “four taxable years” for “10 taxable years.”
(2)The special rule for the first taxable year of the credit period under Section 42(f)(2) of the Internal Revenue Code, relating to special rules for 1st year of credit period, shall not apply to the tax credit under this section.
~~(3)Section 42(f)(3) of the Internal Revenue Code, relating to determination of applicable percentage with respect to increases in qualified basis after 1st year of credit period, is modified to read:~~
If, as of the close of any taxable year in the compliance period, after the first year of the credit period, the qualified basis of any building exceeds the qualified basis of that building as of the close of the first year of the credit period, the housing sponsor, to the extent of its tax credit allocation, shall be eligible for a credit on the excess in an amount equal to the applicable percentage determined pursuant to subdivision (c) for the four-year period beginning with the taxable year in which the increase in qualified basis occurs.
~~(f)The provisions of Section 42(h) of the Internal Revenue Code, relating to limitation on aggregate credit allowable with respect to projects located in a state, shall be modified as follows:~~
(1)Section 42(h)(2) of the Internal Revenue Code, relating to allocated credit amount to apply to all taxable years ending during or after credit allocation year, does not apply and instead the following provisions apply:
The total amount for the four-year credit period of the housing credit dollars allocated in a calendar year to any building shall reduce the aggregate housing credit dollar amount of the California Tax Credit Allocation Committee for the calendar year in which the allocation is made.
(2)Paragraphs (3), (4), (5), (6)(E)(i)(II), (6)(F), (6)(G), (6)(I), (7), and (8) of Section 42(h) of the Internal Revenue Code, relating to limitation on aggregate credit allowable with respect to projects located in a state, do not apply to this section.
(g)The aggregate housing credit dollar amount that may be allocated annually by the California Tax Credit Allocation Committee pursuant to this section, Section 12206, and Section 23610.5 shall be an amount equal to the sum of all the following:
(1)(A)Seventy million dollars ($70,000,000) for the 2001 calendar year, and, for the 2002 calendar year and each calendar year thereafter, seventy million dollars ($70,000,000) increased by the percentage, if any, by which the Consumer Price Index for the preceding calendar year exceeds the Consumer Price Index for the 2001 calendar year. For the purposes of this paragraph, the term “Consumer Price Index” means the last Consumer Price Index for All Urban Consumers published by the federal Department of Labor.
(B)Five hundred million dollars ($500,000,000) for the 2020 calendar year, and up to five hundred million dollars ($500,000,000) for the 2021 calendar year and every year thereafter. Allocations shall only be available pursuant to this subparagraph in the 2021 calendar year and thereafter if the annual Budget Act, or if any bill providing for appropriations related to the Budget Act, specifies an amount to be available for allocation in that calendar year by the California Tax Credit Allocation Committee, and the California Tax Credit Allocation Committee has adopted regulatory reforms aimed at increasing production and containing costs. A housing sponsor receiving a nonfederally subsidized allocation under subdivision (c) shall not be eligible for receipt of the housing credit allocated from the increased amount under this subparagraph. A housing sponsor receiving a nonfederally subsidized allocation under subdivision (c) shall remain eligible for receipt of the housing credit allocated from the credit ceiling amount under subparagraph (A).
(i)Eligible projects for allocations under this subparagraph include any new building, as defined in Section 42(i)(4) of the Internal Revenue Code, relating to newly constructed buildings, and the regulations promulgated thereunder, excluding rehabilitation expenditures under Section 42(e) of the Internal Revenue Code, relating to rehabilitation expenditures treated as separate new building, and is federally subsidized.
(ii)Notwithstanding any other provision of this section, for allocations pursuant to this subparagraph for the 2020 calendar year, the California Tax Credit Allocation Committee shall consider projects located throughout the state and shall allocate housing credits, subject to the minimum federal requirements as set forth in Sections 42 and 142 of the Internal Revenue Code, the minimum requirements set forth in Sections 5033 and 5190 of the California Debt Limit Allocation Committee regulations, and the minimum set forth in Section 10326 of the Tax Credit Allocation Committee regulations, for projects that can begin construction within 180 days from award, subject to availability of funds.
(iii)Notwithstanding any other provision of this section, for allocations pursuant to this subparagraph for the 2021 calendar year and thereafter, the California Tax Credit Allocation Committee shall prescribe regulations, rules, guidelines, or procedures necessary to implement a new allocation methodology that is aimed at increasing production and containing costs.
(iv)Of the amount available pursuant to this subparagraph, and notwithstanding any other requirement of this section, the California Tax Credit Allocation Committee may allocate up to two hundred million dollars ($200,000,000) for housing financed by the California Housing Finance Agency under its Mixed-Income Program.
~~(2)The unused housing credit ceiling, if any, for the preceding calendar years.~~
(3)The amount of housing credit ceiling returned in the calendar year. For purposes of this paragraph, the amount of housing credit dollar amount returned in the calendar year equals the housing credit dollar amount previously allocated to any project that does not become a qualified low-income housing project within the period required by this section or to any project with respect to which an allocation is canceled by mutual consent of the California Tax Credit Allocation Committee and the allocation recipient.
~~(4)Five hundred thousand dollars ($500,000) per calendar year for projects to provide farmworker housing, as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code.~~
(5)The amount of any unallocated or returned credits under former Sections 17053.14, 23608.2, and 23608.3, as those sections read prior to January 1, 2009, until fully exhausted for projects to provide farmworker housing, as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code.
(h)The term “compliance period” as defined in Section 42(i)(1) of the Internal Revenue Code, relating to compliance period, is modified to mean, with respect to any building, the period of 30 consecutive taxable years beginning with the first taxable year of the credit period with respect thereto.
(i)Section 42(j) of the Internal Revenue Code, relating to recapture of credit, shall not be applicable and the following requirements of this section shall be set forth in a regulatory agreement between the California Tax Credit Allocation Committee and the housing sponsor, and the regulatory agreement shall be subordinated, when required, to any lien or encumbrance of any banks or other institutional lenders to the project. The regulatory agreement entered into pursuant to subdivision (f) of Section 50199.14 of the Health and Safety Code shall apply, provided that the agreement includes all of the following provisions:
~~(1)A term not less than the compliance period.~~
~~(2)A requirement that the agreement be recorded in the official records of the county in which the qualified low-income housing project is located.~~
~~(3)A provision stating which state and local agencies can enforce the regulatory agreement in the event the housing sponsor fails to satisfy any of the requirements of this section.~~
(4)A provision that the regulatory agreement shall be deemed a contract enforceable by tenants as third-party beneficiaries thereto and that allows individuals, whether prospective, present, or former occupants of the building, who meet the income limitation applicable to the building, the right to enforce the regulatory agreement in any state court.
~~(5)A provision incorporating the requirements of Section 42 of the Internal Revenue Code, relating to low-income housing credit, as modified by this section.~~
(6)A requirement that the housing sponsor notify the California Tax Credit Allocation Committee or its designee if there is a determination by the Internal Revenue Service that the project is not in compliance with Section 42(g) of the Internal Revenue Code, relating to qualified low-income housing project.
(7)A requirement that the housing sponsor, as security for the performance of the housing sponsor’s obligations under the regulatory agreement, assign the housing sponsor’s interest in rents that it receives from the project, provided that until there is a default under the regulatory agreement, the housing sponsor is entitled to collect and retain the rents.
(8)A provision that the remedies available in the event of a default under the regulatory agreement that is not cured within a reasonable cure period include, but are not limited to, allowing any of the parties designated to enforce the regulatory agreement to collect all rents with respect to the project; taking possession of the project and operating the project in accordance with the regulatory agreement until the enforcer determines the housing sponsor is in a position to operate the project in accordance with the regulatory agreement; applying to any court for specific performance; securing the appointment of a receiver to operate the project; or any other relief as may be appropriate.
(j)(1)The committee shall allocate the housing credit on a regular basis consisting of two or more periods in each calendar year during which applications may be filed and considered. The committee shall establish application filing deadlines, the maximum percentage of federal and state low-income housing tax credit ceiling that may be allocated by the committee in that period, and the approximate date on which allocations shall be made. If the enactment of federal or state law, the adoption of rules or regulations, or other similar events prevent the use of two allocation periods, the committee may reduce the number of periods and adjust the filing deadlines, maximum percentage of credit allocated, and the allocation dates.
(2)The committee shall adopt a qualified allocation plan, as provided in Section 42(m)(1) of the Internal Revenue Code, relating to plans for allocation of credit among projects. In adopting this plan, the committee shall comply with the provisions of Sections 42(m)(1)(B) and 42(m)(1)(C) of the Internal Revenue Code, relating to qualified allocation plan and relating to certain selection criteria must be used, respectively.
(3)Notwithstanding Section 42(m) of the Internal Revenue Code, relating to responsibilities of housing credit agencies, the California Tax Credit Allocation Committee shall allocate housing credits in accordance with the qualified allocation plan and regulations, which shall include the following provisions:
(A)All housing sponsors, as defined by paragraph (3) of subdivision (a), shall demonstrate at the time the application is filed with the committee that the project meets the following threshold requirements:
~~(i)The housing sponsor shall demonstrate that there is a need and demand for low-income housing in the community or region for which it is proposed.~~
(ii)The project’s proposed financing, including tax credit proceeds, shall be sufficient to complete the project and that the proposed operating income shall be adequate to operate the project for the extended use period.
~~(iii)The project shall have enforceable financing commitments, either construction or permanent financing, for at least 50 percent of the total estimated financing of the project.~~
~~(iv)The housing sponsor shall have and maintain control of the site for the project.~~
~~(v)The housing sponsor shall demonstrate that the project complies with all applicable local land use and zoning ordinances.~~
~~(vi)The housing sponsor shall demonstrate that the project development team has the experience and the financial capacity to ensure project completion and operation for the extended use period.~~
(vii)The housing sponsor shall demonstrate the amount of tax credit that is necessary for the financial feasibility of the project and its viability as a qualified low-income housing project throughout the extended use period, taking into account operating expenses, a supportable debt service, reserves, funds set aside for rental subsidies and required equity, and a development fee that does not exceed a specified percentage of the eligible basis of the project prior to inclusion of the development fee in the eligible basis, as determined by the committee.
~~(B)The committee shall give a preference to those projects satisfying all of the threshold requirements of subparagraph (A) if both of the following apply:~~
~~(i)The project serves the lowest income tenants at rents affordable to those tenants.~~
~~(ii)The project is obligated to serve qualified tenants for the longest period.~~
~~(C)In addition to the provisions of subparagraphs (A) and (B), the committee shall use the following criteria in allocating housing credits:~~
~~(i)Projects serving large families in which a substantial number, as defined by the committee, of all residential units are low-income units with three or more bedrooms.~~
~~(ii)Projects providing single-room occupancy units serving very low income tenants.~~
~~(iii)Existing projects that are “at risk of conversion,” as defined by paragraph (6) of subdivision (c).~~
(iv)Projects for which a public agency provides direct or indirect long-term financial support for at least 15 percent of the total project development costs or projects for which the owner’s equity constitutes at least 30 percent of the total project development costs.
~~(v)Projects that provide tenant amenities not generally available to residents of low-income housing projects.~~
~~(4)For purposes of allocating credits pursuant to this section, the committee shall not give preference to any project by virtue of the date of submission of its application.~~
~~(D)Subparagraphs (B) and (C) shall not apply to projects receiving an allocation pursuant to subparagraph (B) of paragraph (1) of subdivision (g).~~
~~(k)Section 42(l) of the Internal Revenue Code, relating to certifications and other reports to secretary, shall be modified as follows:~~
~~The term “secretary” shall be replaced by the term “Franchise Tax Board.”~~
(l)In the case in which the credit allowed under this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following year, and succeeding years, if necessary, until the credit has been exhausted.
(m)A project that received an allocation of a 1989 federal housing credit dollar amount shall be eligible to receive an allocation of a 1990 state housing credit dollar amount, subject to all of the following conditions:
~~(1)The project was not placed in service prior to 1990.~~
~~(2)To the extent the amendments made to this section by the Statutes of 1990 conflict with any provisions existing in this section prior to those amendments, the prior provisions of law shall prevail.~~
~~(3)Notwithstanding paragraph (2), a project applying for an allocation under this subdivision shall be subject to the requirements of paragraph (3) of subdivision (j).~~
(n)The credit period with respect to an allocation of credit in 1989 by the California Tax Credit Allocation Committee of which any amount is attributable to unallocated credit from 1987 or 1988 shall not begin until after December 31, 1989.
~~(o)The provisions of Section 11407(a) of Public Law 101-508, relating to the effective date of the extension of the low-income housing credit, apply to calendar years after 1989.~~
~~(p)The provisions of Section 11407(c) of Public Law 101-508, relating to election to accelerate credit, shall not apply.~~
(q)(1)(A)For a project that receives a preliminary reservation under this section beginning on or after January 1, 2016, a taxpayer may elect in its application to the California Tax Credit Allocation Committee to sell all or any portion of any credit allowed, subject to subparagraphs (B) and (C). The taxpayer may, only once, revoke an election to sell pursuant to this subdivision at any time before the California Tax Credit Allocation Committee allocates a final credit amount for the project pursuant to this section, at which point the election shall become irrevocable.
~~(B)A credit that a taxpayer elects to sell all or a portion of pursuant to this subdivision shall be sold for consideration that is not less than 80 percent of the amount of the credit.~~
(C)A taxpayer shall not elect to sell all or any portion of any credit pursuant to this subdivision if the taxpayer did not make that election in its application submitted to the California Tax Credit Allocation Committee.
(2)(A)The taxpayer that originally received the credit shall report to the California Tax Credit Allocation Committee within 10 days of the sale of the credit, in the form and manner specified by the California Tax Credit Allocation Committee, all required information regarding the purchase and sale of the credit, including the social security or other taxpayer identification number of the unrelated party or parties to whom the credit has been sold, the face amount of the credit sold, and the amount of consideration received by the taxpayer for the sale of the credit.
(B)The California Tax Credit Allocation Committee shall provide an annual listing to the Franchise Tax Board, in a form and manner agreed upon by the California Tax Credit Allocation Committee and the Franchise Tax Board, of the taxpayers that have sold or purchased a credit pursuant to this subdivision.
~~(3)A credit may be sold pursuant to this subdivision to more than one unrelated party.~~
(4)Notwithstanding any other law, the taxpayer that originally received the credit that is sold pursuant to paragraph (1) shall remain solely liable for all obligations and liabilities imposed on the taxpayer by this section with respect to the credit, none of which shall apply to a party to whom the credit has been sold or subsequently transferred. Parties that purchase credits pursuant to paragraph (1) shall be entitled to utilize the purchased credits in the same manner in which the taxpayer that originally received the credit could utilize them.
~~(5)A taxpayer shall not sell a credit allowed by this section if the taxpayer was allowed the credit on any tax return of the taxpayer.~~
(r)The California Tax Credit Allocation Committee may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the California Tax Credit Allocation Committee pursuant to this section.
~~(s)The amendments to this section made by Chapter 1222 of the Statutes of 1993 apply only to taxable years beginning on or after January 1, 1994.~~
(t)This section shall remain in effect on and after December 1, 1990, for as long as Section 42 of the Internal Revenue Code, relating to low-income housing credit, remains in effect. Any unused credit may continue to be carried forward, as provided in subdivision (l), until the credit has been exhausted.
SEC. 25.Section 17561 of the Revenue and Taxation Code is amended to read:
17561.
~~(a)Section 469(c)(7) of the Internal Revenue Code, relating to special rules for taxpayers in real property business, shall not apply.~~
~~(b)Section 469(d)(2) of the Internal Revenue Code, relating to passive activity credits, is modified to refer to the following credits:~~
~~(1)The credit for research expenses allowed by Section 17052.12.~~
~~(2)The credit for certain wages paid (targeted jobs) allowed by Section 17053.7.~~
~~(3)The credit allowed by former Section 17057 (relating to clinical testing expenses).~~
~~(4)The credit for low-income housing allowed by Section 17058.~~
(c)Section 469(g)(1)(A) of the Internal Revenue Code is modified to provide that if all gain or loss realized on the disposition of the taxpayer’s entire interest in any passive activity (or former passive activity) is recognized, the excess of—
~~(1)The sum of—~~
~~(A)Any loss from that activity for that taxable year (determined after application of Section 469(b) of the Internal Revenue Code), plus~~
~~(B)Any loss realized on that disposition, over~~
~~(2)Net income or gain for the taxable year from all passive activities (determined without regard to losses described in paragraph (1)),~~
shall be treated as a loss which is not from a passive activity.
(d)(1)For purposes of applying the provisions of Section 469(i) of the Internal Revenue Code, relating to the twenty-five thousand dollars ($25,000) offset for rental real estate activities, the dollar limitation specified in Section 469(i)(2) of the Internal Revenue Code, relating to dollar limitation, for the credit allowed under Section 17058, relating to low-income housing, shall not apply.
~~(2)The amendments made to this subdivision by the act adding this paragraph shall apply to each taxable year beginning on or after January 1, 2020.~~
~~(e)Section 502 of the Tax Reform Act of 1986 (P.L. 99-514) shall apply.~~
(f)For taxable years beginning on or after January 1, 1987, the provisions of Section 10212 of Public Law 100-203, relating to treatment of publicly traded partnerships under Section 469 of the Internal Revenue Code, shall be applicable.
SEC. 26.Section 23610.5 of the Revenue and Taxation Code is amended to read:
23610.5.
(a)(1)There shall be allowed as a credit against the “tax,” defined in Section 23036, a state low-income housing tax credit in an amount equal to the amount determined in subdivision (c), computed in accordance with Section 42 of the Internal Revenue Code, relating to low-income housing credit, except as otherwise provided in this section.
(2)“Taxpayer,” for purposes of this section, means the sole owner in the case of a “C” corporation, the partners in the case of a partnership, and the shareholders in the case of an “S” corporation.
(3)“Housing sponsor,” for purposes of this section, means the sole owner in the case of a “C” corporation, the partnership in the case of a partnership, and the “S” corporation in the case of an “S” corporation.
(b)(1)The amount of the credit allocated to any housing sponsor shall be authorized by the California Tax Credit Allocation Committee, or any successor thereof, based on a project’s need for the credit for economic feasibility in accordance with the requirements of this section.
~~(A)The low-income housing project shall be located in California and shall meet either of the following requirements:~~
(i)Except for projects to provide farmworker housing, as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code, that are allocated credits solely under the set-aside described in subdivision (c) of Section 50199.20 of the Health and Safety Code, the project’s housing sponsor has been allocated by the California Tax Credit Allocation Committee a credit for federal income tax purposes under Section 42 of the Internal Revenue Code, relating to low-income housing credit.
(ii)It qualifies for a credit under Section 42(h)(4)(B) of the Internal Revenue Code, relating to special rule where 50 percent or more of building is financed with tax-exempt bonds subject to volume cap.
(B)The California Tax Credit Allocation Committee shall not require fees for the credit under this section in addition to those fees required for applications for the tax credit pursuant to Section 42 of the Internal Revenue Code, relating to low-income housing credit. The committee may require a fee if the application for the credit under this section is submitted in a calendar year after the year the application is submitted for the federal tax credit.
(C)(i)For a project that receives a preliminary reservation of the state low-income housing tax credit, allowed pursuant to subdivision (a), on or after January 1, 2009, the credit shall be allocated to the partners of a partnership owning the project in accordance with the partnership agreement, regardless of how the federal low-income housing tax credit with respect to the project is allocated to the partners, or whether the allocation of the credit under the terms of the agreement has substantial economic effect, within the meaning of Section 704(b) of the Internal Revenue Code, relating to determination of distributive share.
(ii)To the extent the allocation of the credit to a partner under this section lacks substantial economic effect, any loss or deduction otherwise allowable under this part that is attributable to the sale or other disposition of that partner’s partnership interest made prior to the expiration of the federal credit shall not be allowed in the taxable year in which the sale or other disposition occurs, but shall instead be deferred until and treated as if it occurred in the first taxable year immediately following the taxable year in which the federal credit period expires for the project described in clause (i).
(iii)This subparagraph shall not apply to a project that receives a preliminary reservation of state low-income housing tax credits under the set-aside described in subdivision (c) of Section 50199.20 of the Health and Safety Code unless the project also receives a preliminary reservation of federal low-income housing tax credits.
~~(2)(A)The California Tax Credit Allocation Committee shall certify to the housing sponsor the amount of tax credit under this section allocated to the housing sponsor for each credit period.~~
~~(B)In the case of a partnership or an “S” corporation, the housing sponsor shall provide a copy of the California Tax Credit Allocation Committee certification to the taxpayer.~~
~~(C)The taxpayer shall, upon request, provide a copy of the certification to the Franchise Tax Board.~~
~~(D)All elections made by the taxpayer pursuant to Section 42 of the Internal Revenue Code, relating to low-income housing credit, shall apply to this section.~~
(E)(i)Except as described in clause (ii) or (iii), for buildings located in designated difficult development areas (DDAs) or qualified census tracts (QCTs), as defined in Section 42(d)(5)(B) of the Internal Revenue Code, relating to increase in credit for buildings in high-cost areas, credits may be allocated under this section in the amounts prescribed in subdivision (c), provided that the amount of credit allocated under Section 42 of the Internal Revenue Code, relating to low-income housing credit, is computed on 100 percent of the qualified basis of the building.
(ii)Notwithstanding clause (i), the California Tax Credit Allocation Committee may allocate the credit for buildings located in DDAs or QCTs that are restricted to having 50 percent of the building’s occupants be special needs households, as defined in the California Code of Regulations by the California Tax Credit Allocation Committee, or receiving an allocation pursuant to subparagraph (B) of paragraph (1) of subdivision (g), even if the taxpayer receives federal credits pursuant to Section 42(d)(5)(B) of the Internal Revenue Code, relating to increase in credit for buildings in high-cost areas, provided that the credit allowed under this section shall not exceed 30 percent of the eligible basis of the building.
(iii)On and after January 1, 2018, notwithstanding clause (i), the California Tax Credit Allocation Committee may allocate the credit pursuant to paragraph (7) of subdivision (c) even if the taxpayer receives federal credits, pursuant to Section 42(d)(5)(B) of the Internal Revenue Code, relating to increase in credit for buildings in high-cost areas.
(F)(i)The California Tax Credit Allocation Committee may allocate a credit under this section in exchange for a credit allocated pursuant to Section 42(d)(5)(B) of the Internal Revenue Code, relating to increase in credit for buildings in high-cost areas, in amounts up to 30 percent of the eligible basis of a building if the credits allowed under Section 42 of the Internal Revenue Code, relating to low-income housing credit, are reduced by an equivalent amount.
~~(ii)An equivalent amount shall be determined by the California Tax Credit Allocation Committee based upon the relative amount required to produce an equivalent state tax credit to the taxpayer.~~
(c)Section 42(b) of the Internal Revenue Code, relating to applicable percentage: 70 percent present value credit for certain new buildings; 30 percent present value credit for certain other buildings, shall be modified as follows:
(1)In the case of any qualified low-income building placed in service by the housing sponsor during 1987, the term “applicable percentage” means 9 percent for each of the first three years and 3 percent for the fourth year for new buildings (whether or not the building is federally subsidized) and for existing buildings.
~~(2)In the case of any qualified low-income building that receives an allocation after 1989 and is a new building not federally subsidized, the term “applicable percentage” means the following:~~
(A)For each of the first three years, the percentage prescribed by the Secretary of the Treasury for new buildings that are not federally subsidized for the taxable year, determined in accordance with the requirements of Section 42(b)(2) of the Internal Revenue Code, relating to temporary minimum credit rate for nonfederally subsidized new buildings, in lieu of the percentage prescribed in Section 42(b)(1)(A) of the Internal Revenue Code.
~~(B)For the fourth year, the difference between 30 percent and the sum of the applicable percentages for the first three years.~~
(3)In the case of any qualified low-income building that is a new building and is federally subsidized and receiving an allocation pursuant to subparagraph (B) of paragraph (1) of subdivision (g), the term “applicable percentage” means for the first three years, 9 percent of the qualified basis of the building, and for the fourth year, 3 percent of the qualified basis of the building.
(4)In the case of any qualified low-income building that receives an allocation after 1989 pursuant to subparagraph (A) of paragraph (1) of subdivision (g) and that is a new building that is federally subsidized or that is an existing building that is “at risk of conversion,” the term “applicable percentage” means the following:
~~(A)For each of the first three years, the percentage prescribed by the Secretary of the Treasury for new buildings that are federally subsidized for the taxable year.~~
~~(B)For the fourth year, the difference between 13 percent and the sum of the applicable percentages for the first three years.~~
(5)In the case of any qualified low-income building that receives an allocation pursuant to subparagraph (A) of paragraph (1) of subdivision (g) that meets all of the requirements of subparagraphs (A) through (D), inclusive, the term “applicable percentage” means 30 percent for each of the first three years and 5 percent for the fourth year. A qualified low-income building receiving an allocation under this paragraph is ineligible to also receive an allocation under paragraph (3).
~~(A)The qualified low-income building is at least 15 years old.~~
~~(B)The qualified low-income building is either:~~
(i)Serving households of very low income or extremely low income such that the average maximum household income as restricted, pursuant to an existing regulatory agreement with a federal, state, county, local, or other governmental agency, is not more than 45 percent of the area median gross income, as determined under Section 42 of the Internal Revenue Code, relating to low-income housing credit, adjusted by household size, and a tax credit regulatory agreement is entered into for a period of not less than 55 years restricting the average targeted household income to no more than 45 percent of the area median income.
~~(ii)Financed under Section 514, or 521 of the National Housing Act of 1949 (42 U.S.C. Sec. 1485).~~
~~(C)The qualified low-income building would have insufficient credits under paragraphs (2) and (3) to complete substantial rehabilitation due to a low appraised value.~~
~~(D)The qualified low-income building will complete the substantial rehabilitation in connection with the credit allocation herein.~~
~~(6)For purposes of this section, the term “at risk of conversion,” with respect to an existing property means a property that satisfies all of the following criteria:~~
~~(A)The property is a multifamily rental housing development in which at least 50 percent of the units receive governmental assistance pursuant to any of the following:~~
(i)New construction, substantial rehabilitation, moderate rehabilitation, property disposition, and loan management set-aside programs, or any other program providing project-based assistance pursuant to Section 8 of the United States Housing Act of 1937, Section 1437f of Title 42 of the United States Code, as amended.
~~(ii)The Below-Market-Interest-Rate Program pursuant to Section 221(d)(3) of the National Housing Act, Sections 1715l(d)(3) and (5) of Title 12 of the United States Code.~~
~~(iii)Section 236 of the National Housing Act, Section 1715z-1 of Title 12 of the United States Code.~~
~~(iv)Programs for rent supplement assistance pursuant to Section 101 of the Housing and Urban Development Act of 1965, Section 1701s of Title 12 of the United States Code, as amended.~~
(v)Programs pursuant to Section 514 of the Housing Act of 1949, Section 1484 of Title 42 of the United States Code, as amended, and Section 515 of the Housing Act of 1949, Section 1485 of Title 42 of the United States Code, as amended.
~~(vi)The low-income housing credit program set forth in Section 42 of the Internal Revenue Code, relating to low-income housing credit.~~
~~(vii)Programs for loans or grants administered by the Department of Housing and Community Development.~~
(B)The restrictions on rent and income levels will terminate or the federally insured mortgage or rent subsidy contract on the property is eligible for prepayment or termination any time within five years before or after the date of application to the California Tax Credit Allocation Committee.
(C)The entity acquiring the property enters into a regulatory agreement that requires the property to be operated in accordance with the requirements of this section for a period equal to the greater of 55 years or the life of the property.
(D)The property satisfies the requirements of Section 42(e) of the Internal Revenue Code, relating to rehabilitation expenditures treated as separate new building, except that the provisions of Section 42(e)(3)(A)(ii)(I) shall not apply.
(7)On and after January 1, 2018, in the case of any qualified low-income building that is (A) farmworker housing, as defined by paragraph (2) of subdivision (h) of Section 50199.7 of the Health and Safety Code, and (B) is federally subsidized, the term “applicable percentage” means for each of the first three years, 20 percent of the qualified basis of the building, and for the fourth year, 15 percent of the qualified basis of the building.
(d)The term “qualified low-income housing project” as defined in Section 42(c)(2) of the Internal Revenue Code, relating to qualified low-income building, is modified by adding the following requirements:
~~(1)The taxpayer shall be entitled to receive a cash distribution from the operations of the project, after funding required reserves, that, at the election of the taxpayer, is equal to:~~
~~(A)An amount not to exceed 8 percent of the lesser of:~~
~~(i)The owner equity, which shall include the amount of the capital contributions actually paid to the housing sponsor and shall not include any amounts until they are paid on an investor note.~~
~~(ii)Twenty percent of the adjusted basis of the building as of the close of the first taxable year of the credit period.~~
(B)The amount of the cashflow from those units in the building that are not low-income units. For purposes of computing cashflow under this subparagraph, operating costs shall be allocated to the low-income units using the “floor space fraction,” as defined in Section 42 of the Internal Revenue Code, relating to low-income housing credit.
(C)Any amount allowed to be distributed under subparagraph (A) that is not available for distribution during the first five years of the compliance period may be accumulated and distributed any time during the first 15 years of the compliance period but not thereafter.
(2)The limitation on return shall apply in the aggregate to the partners if the housing sponsor is a partnership and in the aggregate to the shareholders if the housing sponsor is an “S” corporation.
(3)The housing sponsor shall apply any cash available for distribution in excess of the amount eligible to be distributed under paragraph (1) to reduce the rent on rent-restricted units or to increase the number of rent-restricted units subject to the tests of Section 42(g)(1) of the Internal Revenue Code, relating to in general.
~~(e)The provisions of Section 42(f) of the Internal Revenue Code, relating to definition and special rules relating to credit period, shall be modified as follows:~~
(1)The term “credit period” as defined in Section 42(f)(1) of the Internal Revenue Code, relating to credit period defined, is modified by substituting “four taxable years” for “10 taxable years.”
(2)The special rule for the first taxable year of the credit period under Section 42(f)(2) of the Internal Revenue Code, relating to special rule for 1st year of credit period, shall not apply to the tax credit under this section.
~~(3)Section 42(f)(3) of the Internal Revenue Code, relating to determination of applicable percentage with respect to increases in qualified basis after 1st year of credit period, is modified to read:~~
If, as of the close of any taxable year in the compliance period, after the first year of the credit period, the qualified basis of any building exceeds the qualified basis of that building as of the close of the first year of the credit period, the housing sponsor, to the extent of its tax credit allocation, shall be eligible for a credit on the excess in an amount equal to the applicable percentage determined pursuant to subdivision (c) for the four-year period beginning with the later of the taxable years in which the increase in qualified basis occurs.
~~(f)The provisions of Section 42(h) of the Internal Revenue Code, relating to limitation on aggregate credit allowable with respect to projects located in a state, shall be modified as follows:~~
(1)Section 42(h)(2) of the Internal Revenue Code, relating to allocated credit amount to apply to all taxable years ending during or after credit allocation year, does not apply and instead the following provisions apply:
The total amount for the four-year credit period of the housing credit dollars allocated in a calendar year to any building shall reduce the aggregate housing credit dollar amount of the California Tax Credit Allocation Committee for the calendar year in which the allocation is made.
(2)Paragraphs (3), (4), (5), (6)(E)(i)(II), (6)(F), (6)(G), (6)(I), (7), and (8) of Section 42(h) of the Internal Revenue Code, relating to limitation on aggregate credit allowable with respect to projects located in a state, do not apply to this section.
(g)The aggregate housing credit dollar amount that may be allocated annually by the California Tax Credit Allocation Committee pursuant to this section, Section 12206, and Section 17058 shall be an amount equal to the sum of all the following:
(1)(A)Seventy million dollars ($70,000,000) for the 2001 calendar year, and, for the 2002 calendar year and each calendar year thereafter, seventy million dollars ($70,000,000) increased by the percentage, if any, by which the Consumer Price Index for the preceding calendar year exceeds the Consumer Price Index for the 2001 calendar year. For the purposes of this paragraph, the term “Consumer Price Index” means the last Consumer Price Index for All Urban Consumers published by the federal Department of Labor.
(B)Five hundred million dollars ($500,000,000) for the 2020 calendar year, and up to five hundred million dollars ($500,000,000) for the 2021 calendar year and every year thereafter. Allocations shall only be available pursuant to this subparagraph in the 2021 calendar year and thereafter if the annual Budget Act, or if any bill providing for appropriations related to the Budget Act, specifies an amount to be available for allocation in that calendar year by the California Tax Credit Allocation Committee, and the California Tax Credit Allocation Committee has adopted regulatory reforms aimed at increasing production and containing costs. A housing sponsor receiving a nonfederally subsidized allocation under subdivision (c) shall not be eligible for receipt of the housing credit allocated from the increased amount under this subparagraph. A housing sponsor receiving a nonfederally subsidized allocation under subdivision (c) shall remain eligible for receipt of the housing credit allocated from the credit ceiling amount under subparagraph (A).
(i)Eligible projects for allocations under this subparagraph include any new building, as defined in Section 42(i)(4) of the Internal Revenue Code, relating to newly constructed buildings, and the regulations promulgated thereunder, excluding rehabilitation expenditures under Section 42 (e) of the Internal Revenue Code, relating to rehabilitation expenditures treated as separate new building, and is federally subsidized.
(ii)Notwithstanding any other provision of this section, for allocations pursuant to this subparagraph for the 2020 calendar year, the California Tax Credit Allocation Committee shall consider projects located throughout the state and shall allocate housing credits, subject to the minimum federal requirements as set forth in Sections 42 and 142 of the Internal Revenue Code, the minimum requirements set forth in Sections 5033 and 5190 of the California Debt Limit Allocation Committee regulations, and the minimum set forth in Section 10326 of the Tax Credit Allocation Committee regulations, for projects that can begin construction within 180 days from award, subject to availability of funds.
(iii)Notwithstanding any other provision of this section, for allocations pursuant to this subparagraph for the 2021 calendar year and thereafter, the California Tax Credit Allocation Committee shall prescribe regulations, rules, guidelines, or procedures necessary to implement a new allocation methodology that is aimed at increasing production and containing costs.
(iv)Of the amount available pursuant to this subparagraph, and notwithstanding any other requirement of this section, the California Tax Credit Allocation Committee may allocate up to two hundred million dollars ($200,000,000) for housing financed by the California Housing Finance Agency under its Mixed-Income Program.
~~(2)The unused housing credit ceiling, if any, for the preceding calendar years.~~
(3)The amount of housing credit ceiling returned in the calendar year. For purposes of this paragraph, the amount of housing credit dollar amount returned in the calendar year equals the housing credit dollar amount previously allocated to any project that does not become a qualified low-income housing project within the period required by this section or to any project with respect to which an allocation is canceled by mutual consent of the California Tax Credit Allocation Committee and the allocation recipient.
~~(4)Five hundred thousand dollars ($500,000) per calendar year for projects to provide farmworker housing, as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code.~~
(5)The amount of any unallocated or returned credits under former Sections 17053.14, 23608.2, and 23608.3, as those sections read prior to January 1, 2009, until fully exhausted for projects to provide farmworker housing, as defined in subdivision (h) of Section 50199.7 of the Health and Safety Code.
(h)The term “compliance period” as defined in Section 42(i)(1) of the Internal Revenue Code, relating to compliance period, is modified to mean, with respect to any building, the period of 30 consecutive taxable years beginning with the first taxable year of the credit period with respect thereto.
~~(i)Section 42(j) of the Internal Revenue Code, relating to recapture of credit, shall not be applicable and the following shall be substituted in its place:~~
The requirements of this section shall be set forth in a regulatory agreement between the California Tax Credit Allocation Committee and the housing sponsor, and the regulatory agreement shall be subordinated, when required, to any lien or encumbrance of any banks or other institutional lenders to the project. The regulatory agreement entered into pursuant to subdivision (f) of Section 50199.14 of the Health and Safety Code shall apply, provided that the agreement includes all of the following provisions:
~~(1)A term not less than the compliance period.~~
~~(2)A requirement that the agreement be recorded in the official records of the county in which the qualified low-income housing project is located.~~
~~(3)A provision stating which state and local agencies can enforce the regulatory agreement in the event the housing sponsor fails to satisfy any of the requirements of this section.~~
(4)A provision that the regulatory agreement shall be deemed a contract enforceable by tenants as third-party beneficiaries thereto and that allows individuals, whether prospective, present, or former occupants of the building, who meet the income limitation applicable to the building, the right to enforce the regulatory agreement in any state court.
~~(5)A provision incorporating the requirements of Section 42 of the Internal Revenue Code, relating to low-income housing credit, as modified by this section.~~
(6)A requirement that the housing sponsor notify the California Tax Credit Allocation Committee or its designee if there is a determination by the Internal Revenue Service that the project is not in compliance with Section 42(g) of the Internal Revenue Code, relating to qualified low-income housing project.
(7)A requirement that the housing sponsor, as security for the performance of the housing sponsor’s obligations under the regulatory agreement, assign the housing sponsor’s interest in rents that it receives from the project, provided that until there is a default under the regulatory agreement, the housing sponsor is entitled to collect and retain the rents.
(8)A provision that the remedies available in the event of a default under the regulatory agreement that is not cured within a reasonable cure period include, but are not limited to, allowing any of the parties designated to enforce the regulatory agreement to collect all rents with respect to the project; taking possession of the project and operating the project in accordance with the regulatory agreement until the enforcer determines the housing sponsor is in a position to operate the project in accordance with the regulatory agreement; applying to any court for specific performance; securing the appointment of a receiver to operate the project; or any other relief as may be appropriate.
(j)(1)The committee shall allocate the housing credit on a regular basis consisting of two or more periods in each calendar year during which applications may be filed and considered. The committee shall establish application filing deadlines, the maximum percentage of federal and state low-income housing tax credit ceiling that may be allocated by the committee in that period, and the approximate date on which allocations shall be made. If the enactment of federal or state law, the adoption of rules or regulations, or other similar events prevent the use of two allocation periods, the committee may reduce the number of periods and adjust the filing deadlines, maximum percentage of credit allocated, and allocation dates.
(2)The committee shall adopt a qualified allocation plan, as provided in Section 42(m)(1) of the Internal Revenue Code, relating to plans for allocation of credit among projects. In adopting this plan, the committee shall comply with the provisions of Sections 42(m)(1)(B) and 42(m)(1)(C) of the Internal Revenue Code, relating to qualified allocation plan and relating to certain selection criteria must be used, respectively.
(3)Notwithstanding Section 42(m) of the Internal Revenue Code, relating to responsibilities of housing credit agencies, the California Tax Credit Allocation Committee shall allocate housing credits in accordance with the qualified allocation plan and regulations, which shall include the following provisions:
(A)All housing sponsors, as defined by paragraph (3) of subdivision (a), shall demonstrate at the time the application is filed with the committee that the project meets the following threshold requirements:
~~(i)The housing sponsor shall demonstrate there is a need and demand for low-income housing in the community or region for which it is proposed.~~
(ii)The project’s proposed financing, including tax credit proceeds, shall be sufficient to complete the project and that the proposed operating income shall be adequate to operate the project for the extended use period.
~~(iii)The project shall have enforceable financing commitments, either construction or permanent financing, for at least 50 percent of the total estimated financing of the project.~~
~~(iv)The housing sponsor shall have and maintain control of the site for the project.~~
~~(v)The housing sponsor shall demonstrate that the project complies with all applicable local land use and zoning ordinances.~~
~~(vi)The housing sponsor shall demonstrate that the project development team has the experience and the financial capacity to ensure project completion and operation for the extended use period.~~
(vii)The housing sponsor shall demonstrate the amount of tax credit that is necessary for the financial feasibility of the project and its viability as a qualified low-income housing project throughout the extended use period, taking into account operating expenses, a supportable debt service, reserves, funds set aside for rental subsidies and required equity, and a development fee that does not exceed a specified percentage of the eligible basis of the project prior to inclusion of the development fee in the eligible basis, as determined by the committee.
~~(B)The committee shall give a preference to those projects satisfying all of the threshold requirements of subparagraph (A) if both of the following apply:~~
~~(i)The project serves the lowest income tenants at rents affordable to those tenants.~~
~~(ii)The project is obligated to serve qualified tenants for the longest period.~~
~~(C)In addition to the provisions of subparagraphs (A) and (B), the committee shall use the following criteria in allocating housing credits:~~
~~(i)Projects serving large families in which a substantial number, as defined by the committee, of all residential units are low-income units with three or more bedrooms.~~
~~(ii)Projects providing single-room occupancy units serving very low income tenants.~~
~~(iii)Existing projects that are “at risk of conversion,” as defined by paragraph (6) of subdivision (c).~~
(iv)Projects for which a public agency provides direct or indirect long-term financial support for at least 15 percent of the total project development costs or projects for which the owner’s equity constitutes at least 30 percent of the total project development costs.
~~(v)Projects that provide tenant amenities not generally available to residents of low-income housing projects.~~
~~(D)Subparagraph (B) and (C) shall not apply to projects receiving an allocation pursuant to subparagraph (B) of paragraph (1) of subdivision (g).~~
(4)For purposes of allocating credits pursuant to this section, the committee shall not give preference to any project by virtue of the date of submission of its application except to break a tie when two or more of the projects have an equal rating.
(5)Not less than 20 percent of the low-income housing tax credits available annually under this section, Section 12206, and Section 17058 shall be set aside for allocation to rural areas as defined in Section 50199.21 of the Health and Safety Code. Any amount of credit set aside for rural areas remaining on or after October 31 of any calendar year shall be available for allocation to any eligible project. No amount of credit set aside for rural areas shall be considered available for any eligible project so long as there are eligible rural applications pending on October 31.
~~(k)Section 42(l) of the Internal Revenue Code, relating to certifications and other reports to secretary, shall be modified as follows:~~
~~The term “secretary” shall be replaced by the term “Franchise Tax Board.”~~
(l)In the case in which the credit allowed under this section exceeds the “tax,” the excess may be carried over to reduce the “tax” in the following year, and succeeding years, if necessary, until the credit has been exhausted.
(m)A project that received an allocation of a 1989 federal housing credit dollar amount shall be eligible to receive an allocation of a 1990 state housing credit dollar amount, subject to all of the following conditions:
~~(1)The project was not placed in service prior to 1990.~~
(2)To the extent the amendments made to this section by the Statutes of 1990 conflict with any provisions existing in this section prior to those amendments, the prior provisions of law shall prevail.
~~(3)Notwithstanding paragraph (2), a project applying for an allocation under this subdivision shall be subject to the requirements of paragraph (3) of subdivision (j).~~
(n)The credit period with respect to an allocation of credit in 1989 by the California Tax Credit Allocation Committee of which any amount is attributable to unallocated credit from 1987 or 1988 shall not begin until after December 31, 1989.
~~(o)The provisions of Section 11407(a) of Public Law 101-508, relating to the effective date of the extension of the low-income housing credit, apply to calendar years after 1989.~~
~~(p)The provisions of Section 11407(c) of Public Law 101-508, relating to election to accelerate credit, shall not apply.~~
(q)(1)A corporation may elect to assign any portion of any credit allowed under this section to one or more affiliated corporations for each taxable year in which the credit is allowed. For purposes of this subdivision, “affiliated corporation” has the meaning provided in subdivision (b) of Section 25110, as that section was amended by Chapter 881 of the Statutes of 1993, as of the last day of the taxable year in which the credit is allowed, except that “100 percent” is substituted for “more than 50 percent” wherever it appears in the section, as that section was amended by Chapter 881 of the Statutes of 1993, and “voting common stock” is substituted for “voting stock” wherever it appears in the section, as that section was amended by Chapter 881 of the Statutes of 1993.
~~(2)The election provided in paragraph (1):~~
~~(A)May be based on any method selected by the corporation that originally receives the credit.~~
~~(B)Shall be irrevocable for the taxable year the credit is allowed, once made.~~
~~(C)May be changed for any subsequent taxable year if the election to make the assignment is expressly shown on each of the returns of the affiliated corporations that assign and receive the credits.~~
(r)(1)(A)For a project that receives a preliminary reservation under this section beginning on or after January 1, 2016, a taxpayer may elect in its application to the California Tax Credit Allocation Committee to sell all or any portion of any credit allowed, subject to subparagraphs (B) and (C). The taxpayer may, only once, revoke an election to sell pursuant to this subdivision at any time before the California Tax Credit Allocation Committee allocates a final credit amount for the project pursuant to this section, at which point the election shall become irrevocable.
~~(B)A credit that a taxpayer elects to sell all or a portion of pursuant to this subdivision shall be sold for consideration that is not less than 80 percent of the amount of the credit.~~
(C)A taxpayer shall not elect to sell all or any portion of any credit pursuant to this subdivision if the taxpayer did not make that election in its application submitted to the California Tax Credit Allocation Committee.
(2)(A)The taxpayer that originally received the credit shall report to the California Tax Credit Allocation Committee within 10 days of the sale of the credit, in the form and manner specified by the California Tax Credit Allocation Committee, all required information regarding the purchase and sale of the credit, including the social security or other taxpayer identification number of the unrelated party or parties to whom the credit has been sold, the face amount of the credit sold, and the amount of consideration received by the taxpayer for the sale of the credit.
(B)The California Tax Credit Allocation Committee shall provide an annual listing to the Franchise Tax Board, in a form and manner agreed upon by the California Tax Credit Allocation Committee and the Franchise Tax Board, of the taxpayers that have sold or purchased a credit pursuant to this subdivision.
~~(3)A credit may be sold pursuant to this subdivision to more than one unrelated party.~~
(4)Notwithstanding any other law, the taxpayer that originally received the credit that is sold pursuant to paragraph (1) shall remain solely liable for all obligations and liabilities imposed on the taxpayer by this section with respect to the credit, none of which shall apply to a party to whom the credit has been sold or subsequently transferred. Parties that purchase credits pursuant to paragraph (1) shall be entitled to utilize the purchased credits in the same manner in which the taxpayer that originally received the credit could utilize them.
~~(5)A taxpayer shall not sell a credit allowed by this section if the taxpayer was allowed the credit on any tax return of the taxpayer.~~
(s)The California Tax Credit Allocation Committee may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section, including any guidelines regarding the allocation of the credit allowed under this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the California Tax Credit Allocation Committee pursuant to this section.
~~(t)Any unused credit may continue to be carried forward, as provided in subdivision (l), until the credit has been exhausted.~~
~~(u)This section shall remain in effect on and after December 1, 1990, for as long as Section 42 of the Internal Revenue Code, relating to low-income housing credit, remains in effect.~~
(v)The amendments to this section made by Chapter 1222 of the Statutes of 1993 shall apply only to taxable years beginning on or after January 1, 1994, except that paragraph (1) of subdivision (q), as amended, shall apply to taxable years beginning on or after January 1, 1993.
SEC. 27.Section 24692 of the Revenue and Taxation Code is amended to read:
24692.
~~(a)Section 469 of the Internal Revenue Code, relating to passive activity losses and credits limited, shall apply, except as otherwise provided.~~
~~(b)Section 469(c)(7) of the Internal Revenue Code, relating to special rules for taxpayers in real property business, shall not apply.~~
~~(c)Section 469(d)(2) of the Internal Revenue Code, relating to passive activity credits, is modified to refer to the following credits:~~
~~(1)The credit for research expenses allowed by Section 23609.~~
~~(2)The credit for clinical testing expenses allowed by Section 23609.5.~~
~~(3)The credit for low-income housing allowed by Section 23610.5.~~
~~(4)The credit for certain wages paid (targeted jobs) allowed by Section 23621.~~
(d)Section 469(g)(1)(A) of the Internal Revenue Code is modified to provide that if all gain or loss realized on the disposition of the taxpayer’s entire interest in any passive activity (or former passive activity) is recognized, the excess of—
~~(1)The sum of—~~
~~(A)Any loss from that activity for that taxable year (determined after application of Section 469(b) of the Internal Revenue Code), plus~~
~~(B)Any loss realized on that disposition, over~~
(2)Net income or gain for the taxable year from all passive activities (determined without regard to losses described in paragraph (1)), shall be treated as a loss which is not from a passive activity.
(e)(1)For purposes of applying Section 469(i) of the Internal Revenue Code, relating to the twenty-five thousand dollars ($25,000) offset for rental real estate activities, the dollar limitation specified in Section 469(i)(2) of the Internal Revenue Code, relating to dollar limitation, for the credit allowed under Section 23610.5, relating to low-income housing, shall not apply.
~~(2)The amendments made to this subdivision by the act adding this paragraph shall apply to each taxable year beginning on or after January 1, 2020.~~
~~(f)Section 502 of the Tax Reform Act of 1986 (Public Law 99-514) shall apply.~~
(g)For each taxable year beginning on or after January 1, 1987, Section 10212 of Public Law 100-203, relating to treatment of publicly traded partnerships under Section 469 of the Internal Revenue Code, shall apply, except as otherwise provided.
(h)The amendments to Section 469(k) of the Internal Revenue Code made by Section 2004 of Public Law 100-647, relating to separate application of section in case of publicly traded partnerships, shall apply to each taxable year beginning on or after January 1, 1990, except as otherwise provided.
SEC. 28.Section 8256 of the Welfare and Institutions Code is amended to read:
8256.
(a)Agencies and departments administering state programs created on or after July 1, 2017, shall collaborate with the coordinating council to adopt guidelines and regulations to incorporate core components of Housing First.
(b)By July 1, 2019, except as otherwise provided in subdivision (c), agencies and departments administering state programs in existence prior to July 1, 2017, shall collaborate with the coordinating council to revise or adopt guidelines and regulations that incorporate the core components of Housing First, if the existing guidelines and regulations do not already incorporate the core components of Housing First.
~~(c)(1)An agency or department that administers programs that fund recovery housing shall comply with the requirements of subdivision (b) by July 1, 2020.~~
~~(2)An agency or department that administers programs that fund recovery housing shall additionally do both of the following:~~
(A)Consult with the Legislature, the Homeless Coordinating and Financing Council, the Business, Consumer Services, and Housing Agency, and other stakeholders between July 1, 2019, and July 1, 2020, to identify ways to improve the provision of housing to individuals who receive funding from that agency or department, consistent with the applicable requirements of state law.
(B)By March 1, 2020, submit a report to the Senate Committee on Budget and Fiscal Review and the Assembly Committee on Budget on its efforts to comply with Housing First specifically and to improve the provision of housing to individuals who receive housing assistance from the agency or department generally.
(3)(A)For purposes of this subdivision, “recovery housing” means sober living facilities and programs that provide housing in an abstinence-focused and peer-supported community if participation is voluntary, unless that participation is pursuant to a court order or is a condition of release for individuals under the jurisdiction of a county probation department of the Department of Corrections and Rehabilitation.
(B)A recovery housing program shall comply with the core components of Housing First, other than those components described in paragraphs (5) through (7), inclusive, of subdivision (b) of Section 8255.
SEC. 29.
(a)Notwithstanding Section 13340 of the Government Code, there is hereby continuously appropriated, without regard to fiscal years, the sum of five hundred million dollars ($500,000,000) from the General Fund to the Department of Housing and Community Development. The moneys appropriated pursuant to this section shall be transferred to the Self-Help Housing Fund established pursuant to Section 50697.1 of the Health and Safety Code, based on the following schedule:
~~(1)For the 2019–20 fiscal year, two hundred million dollars ($200,000,000).~~
~~(2)For the 2020–21 fiscal year, ninety-five million dollars ($95,000,000).~~
~~(3)For the 2021–22 fiscal year, one hundred twenty million dollars ($120,000,000).~~
~~(4)For the 2022–23 fiscal year, eighty-five million dollars ($85,000,000).~~
(b)Notwithstanding Section 50697.1 of the Health and Safety Code, the Department of Housing and Community Development shall transfer the moneys appropriated pursuant to subdivision (a) to the California Housing Finance Agency, to be used to finance low and moderate income housing.
(c)The Director of Finance may change the release of funds scheduled in subparagraphs (1) through (4), inclusive, of subdivision (a), if deemed necessary. The director shall notify the Chairperson of the Joint Legislative Budget Committee, or the chairpersons’s designee, of the director’s intent to notify the Controller of the necessity to change the release of funds scheduled in paragraphs (1) through (4), inclusive, of subdivision (a). The total amount appropriated shall not be greater or lesser than the amount appropriated in subdivision (a). The Controller shall make the funds available to the department not sooner than five days after receipt of this notification.
SEC. 30.
The Legislature finds and declares that Section 4 of this act, amending Section 65585 of, and Sections 5 and 6 of this act, adding Sections 65589.9 and 65589.11 to, the Government Code, address a matter of statewide concern rather than a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, Sections 4, 5, and 6 of this act apply to all cities, including charter cities.
SEC. 31.
No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code.
SEC. 32.
This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately.

Bill Text

SB-102 Public health omnibus.(2019-2020)

Bill Start

LEGISLATIVE COUNSEL'S DIGEST

Digest Key

Bill Text

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

SECTION 1.

SEC. 2.

100500.

SEC. 3.

1367.0085.

SEC. 4.

1386.

SEC. 5.

105250.1.

SEC. 6.

SEC. 7.

SEC. 8.

120962.

SEC. 9.

120972.

SEC. 10.

SEC. 11.

CHAPTER 8.5. Health Care Cost Transparency Database Payments Data Program

SEC. 12.

127671.

SEC. 13.

127671.1.

SEC. 14.

SEC. 15.

127672.

SEC. 16.

127672.8.

SEC. 17.

127672.9.

SEC. 18.

SEC. 19.

127673.

SEC. 20.

127673.1.

SEC. 21.

127673.2.

SEC. 22.

127673.3.

SEC. 23.

127673.4.

SEC. 24.

127673.5.

SEC. 25.

127673.6.

SEC. 26.

127673.7.

SEC. 27.

127673.8.

SEC. 28.

127673.81.

SEC. 29.

127673.82.

SEC. 30.

127673.83.

SEC. 31.

127673.84.

SEC. 32.

SEC. 33.

127674.

SEC. 34.

127674.1.

SEC. 35.

CHAPTER 4.1. General Regulation of Health Insurers

10403.

SEC. 36.

10112.296.

SEC. 37.

19548.2.

SEC. 38.

4107.

SEC. 39.

4300.

SEC. 40.