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AB-394 Housing: Building Homes and Jobs Act: report.(2023-2024)



Current Version: 03/01/23 - Amended Assembly

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AB394:v98#DOCUMENT

Amended  IN  Assembly  March 01, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 394

Introduced by Assembly Member Hoover
(Coauthors: Assembly Members Gallagher and Mathis)

February 02, 2023

An act to amend Section 50470 of, and to add Chapter 20 (commencing with Section 50899.9) to Part 2 of Division 31 of, the Health and Safety Code, relating to housing, and making an appropriation therefor. An act to add Section 50476 to the Health and Safety Code, relating to housing.


LEGISLATIVE COUNSEL'S DIGEST


AB 394, as amended, Hoover. Housing Resources Augmentation Program. Housing: Building Homes and Jobs Act: report.
Existing law, the Building Homes and Jobs Act, imposes a fee, except as provided, of $75 to be paid at the time of the recording of every real estate instrument, paper, or notice required or permitted by law to be recorded, per each single transaction per single parcel of real property, not to exceed $225. Existing law requires that a county recorder send revenues from this fee, as provided, to the State Controller for deposit in the Building Homes and Jobs Trust Fund. Existing law, for moneys collected on and after January 1, 2019, requires 20% of all moneys in the fund, upon appropriation by the Legislature, to be expended for affordable owner-occupied workforce housing.

This bill would reduce the expenditure of moneys in the Building Homes and Jobs Trust Fund for affordable owner-occupied workforce housing from 20% to 10%, and would, instead, require 10% of all moneys in the fund to be transferred to the Housing Resources Augmentation Fund, established by the bill. The bill would continuously appropriate moneys in the Housing Resources Augmentation Fund to the Department of Housing and Community Development for the administration of a Housing Resources Augmentation Program, which would make bonus payments to cities and counties with new units of housing, as provided, and for reimbursement of costs incurred by the department in administering the program.

This bill would require the Department of Housing and Community Development to create and submit a report to the Legislature that includes specified information relating to the expenditure of the above-described moneys for affordable owner-occupied workforce housing, including how those moneys are being utilized and the number of new homeowners as a result of the expenditure of those moneys, among other things.
Vote: TWO_THIRDSMAJORITY   Appropriation: YESNO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 50476 is added to the Health and Safety Code, immediately following Section 50475, to read:

50476.
 (a) The department shall create and submit a report to the Legislature, in compliance with Section 9795 of the Government Code, that includes all of the following information:
(1) How affordable owner-occupied workforce housing moneys are being utilized. Information provided pursuant to this paragraph shall include, but is not limited to, programs funded with the moneys and the program’s funding recipients and amounts.
(2) The number of new homeowners as a result of the expenditure of affordable owner-occupied workforce housing moneys.
(3) The amount of affordable owner-occupied workforce housing moneys granted, loaned, or otherwise provided to low- or moderate-income households as downpayment assistance.
(4) The amount of affordable owner-occupied workforce housing moneys granted, loaned, or otherwise provided to for-profit and nonprofit developers.
(b) For purposes of this section, the following definitions apply:
(1) “Affordable owner-occupied workforce housing moneys” means any moneys appropriated from the Building Homes and Jobs Trust Fund pursuant to subparagraph (A) of paragraph (2) of subdivision (b) of Section 50470.
(2) “Low- or moderate-income households” means households earning up to 120 percent of area median income, or 150 percent of area median income in high-cost areas.

SECTION 1.Section 50470 of the Health and Safety Code is amended to read:
50470.

(a)(1)There is hereby created in the State Treasury the Building Homes and Jobs Trust Fund. All interest or other increments resulting from the investment of moneys in the fund shall be deposited in the fund, notwithstanding Section 16305.7 of the Government Code.

(2)Moneys in the Building Homes and Jobs Trust Fund shall not be subject to transfer to any other fund pursuant to any provision of Part 2 (commencing with Section 16300) of Division 4 of Title 2 of the Government Code, except to the Surplus Money Investment Fund.

(b)Moneys in the Building Homes and Jobs Trust Fund shall be appropriated either through the annual Budget Act, or as provided in this subdivision, in accordance with the following:

(1)Moneys collected on and after January 1, 2018, and until December 31, 2018, shall, upon appropriation by the Legislature, be allocated as follows:

(A)Fifty percent of deposits into the fund shall be made available for local governments to update planning documents and zoning ordinances in order to streamline housing production, including, but not limited to, general plans, community plans, specific plans, sustainable communities strategies, and local coastal programs. Eligible uses also include new environmental analyses that eliminate the need for project-specific review and local process updates that improve and expedite local permitting.

(i)Five percent of the funds specified by this subparagraph shall be available for technical assistance to jurisdictions updating specified planning documents. Technical assistance shall be provided by the department and the Governor’s Office of Planning and Research.

(ii)The funds to be allocated pursuant to this subparagraph shall be held by the department until a local government submits a request for use. The request shall include a description of the proposed use of the funds in the interest of accelerating housing production. The proposed use of these funds shall be included in the local government’s funding plan and annual reports pursuant to subclauses (II) and (III) of clause (ii) of subparagraph (B) of paragraph (2). Each recipient of funds under the program shall encumber the funds by December 31, 2020, and shall expend those funds no later than December 31, 2023. Any of these funds not allocated by the department within the first two years that those funds are available shall be made available by the department for the Multifamily Housing Program (Chapter 6.7 (commencing with Section 50675)).

(B)Fifty percent of deposits into the fund shall be made available to the department to assist persons experiencing or at risk of homelessness, including, but not limited to, providing rapid rehousing, rental assistance, navigation centers, and the new construction, rehabilitation, and preservation of permanent and transitional rental housing.

(C)The department shall ensure geographic equity in the distribution and expenditure of funds allocated pursuant to this paragraph.

(2)Moneys collected on and after January 1, 2019, shall be allocated as follows:

(A)Ten percent of all moneys in the fund shall, upon appropriation by the Legislature, be expended for affordable owner-occupied workforce housing.

(B)(i)Seventy percent of moneys deposited in the fund shall, upon appropriation by the Legislature, be made available to local governments as follows:

(I)Ninety percent of the moneys specified in this subparagraph shall be allocated based on the formula specified in Section 5306 of Title 42 of the United States Code, in accordance with the distribution of funds pursuant to that formula for the federal Fiscal Year 2017, except that the portion allocated to nonentitlement areas pursuant to that section shall be distributed through a competitive grant program, administered by the department, as follows:

(ia)The department shall award priority points to a county that has a population of 200,000 or less within the unincorporated areas of the county, to a local government that did not receive an award based on the formula specified in Section 5306 of Title 42 of the United States Code in 2016, and to a local government that pledges to use the money awarded pursuant to a competitive grant under this subclause to assist persons experiencing or at risk of homelessness, including, but not limited to, providing rapid rehousing, rental assistance, navigation centers, and the new construction, rehabilitation, and preservation of permanent and transitional rental housing.

(ib)Moneys awarded to a local government pursuant to the competitive grant program shall be used for the purposes specified in subparagraph (D).

(II)The remaining 10 percent of the moneys specified in this subparagraph shall be allocated equitably among local jurisdictions that are nonentitlement areas pursuant to the formula specified in Section 5306 of Title 42 of the United States Code for federal Fiscal Year 2017.

(ii)To receive moneys pursuant to this subparagraph, local governments shall document minimum standards including the following:

(I)Submit a plan to the department detailing the manner in which allocated funds will be used by the local government in a manner consistent with this paragraph and to meet the local government’s unmet share of the regional housing needs allocation.

(II)Have a compliant housing element with the state and submit a current annual report pursuant to Section 65400 of the Government Code.

(III)Submit an annual report to the department that provides ongoing tracking of the uses and expenditures of any allocated funds.

(IV)Funds may be expended for the uses listed in subparagraph (D). Two or more local governments that receive an allocation pursuant to this subparagraph may expend those moneys on a joint project that is an authorized use under subparagraph (D).

(V)Prioritize investments that increase the supply of housing to households that are at or below 60 percent of area median income, adjusted for household size.

(VI)If a local government does not have a documented plan to expend the moneys allocated to it pursuant to this subparagraph within five years of that allocation, those moneys shall be exempt from the allocation requirements in this paragraph and shall revert to, and be paid and deposited in, the Housing Rehabilitation Loan Fund established pursuant to Section 50661 to be used for the Multifamily Housing Program (Chapter 6.7 (commencing with Section 50675)) or for technical assistance for local governments.

(VII)A local government may petition the department to return any moneys allocated to it pursuant to this subparagraph. Any moneys returned pursuant to this clause shall be used for the Multifamily Housing Program (Chapter 6.7 (commencing with Section 50675)).

(C)Thirty percent of moneys deposited in the fund shall be made available to the department for use as follows:

(i)Five percent of the moneys deposited in the fund shall, upon appropriation by the Legislature, be used for state incentive programs, including loans and grants administered by the department. If the department receives insufficient funding applications for incentive programs financed pursuant to this clause, the department shall make those funds available for the Multifamily Housing Program (Chapter 6.7 (commencing with Section 50675)).

(ii)(I)Subject to subclause (II), 10 percent of the moneys deposited in the fund shall, upon appropriation by the Legislature, be used to address affordable homeownership and rental housing opportunities for agricultural workers and their families.

(II)On and after January 1, 2020, housing funded pursuant to this clause shall not be rented, sold, or subleased to an agricultural employer, as defined in Section 1140.4 of the Labor Code, or its agent, or a farm labor contractor, as defined in Section 1682 of the Labor Code, or its agent, who employs at least one H-2A worker, as defined in Section 50205, until the expiration of the regulatory agreement or affordability covenant, as applicable. A person or entity who receives funds made available pursuant to this clause on or after January 1, 2020, and expends any of those funds for the purpose of funding predevelopment of, developing, or operating any housing that is rented, sold, or subleased to an agricultural employer, as defined in Section 1140.4 of the Labor Code, or its agent, or a farm labor contractor, as defined in Section 1682 of the Labor Code, or its agent, and who employs at least one H-2A worker, as defined in Section 50205, until the expiration of the regulatory agreement or affordability covenant, as applicable, shall reimburse the department or other state agency that provided those funds, as provided in paragraph (2) of subdivision (b) of Section 50205. This subclause shall not apply to any contract entered into or any financial assistance provided pursuant to this clause prior to January 1, 2020.

(III)A person or entity who receives funds made available pursuant to this section on and after January 1, 2020, and expends any of those funds for the purpose of funding predevelopment of, developing, or operating any housing shall submit a declaration to the department declaring the following:

(ia)(Ia)The person or entity is not an agricultural employer, as defined in Section 1140.4 of the Labor Code, or its agent, or a farm labor contractor, as defined in Section 1682 of the Labor Code, or its agent, who employs at least one H-2A worker, as defined in Section 50205.

(Ib)The person or entity will not rent, sell, or sublease any housing funded pursuant to this chapter to an agricultural employer, as defined in Section 1140.4 of the Labor Code, or its agent, or a farm labor contractor, as defined in Section 1682 of the Labor Code, or its agent, who employs at least one H-2A worker, as defined in Section 50205, until the expiration of the regulatory agreement or affordability covenant, as applicable.

(ib)The declaration described in sub-subclause (ia) can be met through the inclusion in a regulatory agreement or affordability covenant, as applicable, with the department that is signed by the person or entity receiving funds pursuant to this chapter.

(iii)Fifteen percent of the moneys deposited in the fund shall, notwithstanding any other provision of this section or Section 13340 of the Government Code, be transferred to the California Housing Finance Fund and continuously appropriated to the California Housing Finance Agency for the purpose of creating mixed income multifamily residential housing for lower to moderate-income households pursuant to Chapter 6.7 (commencing with Section 51325) of Part 3.

(D)Ten percent of all moneys in the fund shall be transferred to the Housing Resources Augmentation Fund created pursuant to Section 50899.9.

(E)The moneys in the fund allocated to local governments may be expended for the following purposes:

(i)The predevelopment, development, acquisition, rehabilitation, and preservation of multifamily, residential live-work, rental housing that is affordable to extremely low, very low, low-, and moderate-income households, including necessary operating subsidies.

(ii)Affordable rental and ownership housing that meets the needs of a growing workforce earning up to 120 percent of area median income, or 150 percent of area median income in high-cost areas.

(iii)Matching portions of funds placed into local or regional housing trust funds.

(iv)Matching portions of funds available through the Low and Moderate Income Housing Asset Fund pursuant to subdivision (d) of Section 34176 of the Health and Safety Code.

(v)Capitalized reserves for services connected to the creation of new permanent supportive housing, including, but not limited to, developments funded through the Veterans Housing and Homelessness Prevention Bond Act of 2014.

(vi)Assisting persons who are experiencing or at risk of homelessness, including providing rapid rehousing, rental assistance, navigation centers, emergency shelters, and the new construction, rehabilitation, and preservation of permanent and transitional housing.

(vii)Accessibility modifications.

(viii)Efforts to acquire and rehabilitate foreclosed or vacant homes.

(ix)Homeownership opportunities, including, but not limited to, downpayment assistance.

(x)Fiscal incentives or matching funds to local agencies that approve new housing for extremely low, very low, low-, and moderate-income households.

(3)A state or local entity that receives an appropriation or allocation pursuant to this chapter shall use no more than 5 percent of that appropriation or allocation for costs related to the administration of the housing program for which the appropriation or allocation was made.

(c)Both of the following shall be paid and deposited in the fund:

(1)Any moneys appropriated and made available by the Legislature for purposes of the fund.

(2)Any other moneys that may be made available to the department for the purposes of the fund from any other source or sources.

(d)In consultation with stakeholders, the department may adopt guidelines to implement this section, including to determine allocation methodologies. Any guideline, rule, policy, or standard of general application employed by the department in implementing this chapter shall not be subject to the requirements of 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).

SEC. 2.Chapter 20 (commencing with Section 50899.9) is added to Part 2 of Division 31 of the Health and Safety Code, to read:
20.Housing Resources Augmentation Program
50899.9.

(a)The Housing Resources Augmentation Fund is hereby created in the State Treasury.

(b)Notwithstanding Section 13340 of the Government Code, all moneys transferred to the fund pursuant to subparagraph (D) of paragraph (2) of subdivision (b) of Section 50470 are hereby continuously appropriated to the department, without regard to fiscal years, for both of the following the purposes:

(1)To reimburse the department for any administrative costs incurred in the administration of this chapter. This amount shall not exceed 5 percent of the amount appropriated to the department pursuant to this section.

(2)For making bonus payments to cities and counties in accordance with Section 50899.9.1.

50899.9.1.

(a)There is hereby established the Housing Resources Augmentation Program, to be administered by the department, for the purpose of making bonus payments to cities and counties in accordance with this chapter.

(b)The department shall do both of the following:

(1)Make bonus payments to cities and counties with new units of housing on a first-come-first-served basis. The amount of the bonus payment shall be six hundred dollars ($600) for each new unit of housing.

(2)Publish deadlines and written procedures for cities and counties to apply for the bonus payments.

(c)Cities and counties shall apply to the department, in the form and manner prescribed by the department, for the bonus payments.

(d)For purposes of this section, “new units of housing” means a new unit of housing that has been issued a certificate of occupancy in the city or county applying for the bonus payment pursuant to this section that is required to meet that city or county’s regional housing need.