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Home My WebLink About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±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eSaulnier and Steinberg) As amended on April 16, 2012 PERMANENTLY FUNDING THE HOUSING OPPORTUNITY AND MARKET STABILIZATION (HOMeS) TRUST FUND Fact Sheet SUMMARY This bill imposes a $75 fee on the recordation of each real-estate document, excluding documents related to the sale of a property, in order to permanently fund the Housing Opportunity and Market Stabilization (HOMeS) Trust Fund that will support the development, acquisition, rehabilitation, and preservation of homes affordable to low- and moderate-income households, including emergency shelters, transitional and permanent rental housing, foreclosure mitigation, and homeownership opportunities. It is estimated that this fee will generate an average of $525 million per year for the HOMeS Trust Fund. BACKGROUND Having a healthy housing market that provides an adequate supply of homes affordable to families and individuals at all income levels is critical to the economic prosperity and quality of life in California. The decline in housing production has played a significant role in creating and prolonging the Great Recession. The lack of sufficient, affordable homes near jobs impedes economic growth and development by making it difficult for California employers to attract and retain employees. In addition, continued affordability gaps mean that California has the second lowest homeownership rate in the nation, that minimum wage earners have to work 120 hours per week to afford the average two bedroom rental apartment, and that California has the largest population of homeless persons in the nation. In the face of these critical needs, California’s investment in affordable housing is declining dramatically. In 2000 and 2006, voters approved roughly $5 billion in housing bonds. These funds have financed the construction, rehabilitation and preservation of over 11,600 shelter spaces and 57,220 affordable apartments, including 2,500 supportive homes for people experiencing homelessness. In addition, these funds have helped 57,290 families become or remain homeowners. Nearly all of the voter-approved funding for affordable housing has now been awarded, and no more bond funds are available. In addition, California’s redevelopment agencies used to generate $1 billion per year for affordable homes as a result of the requirement that they set aside 20% of tax increment for affordable housing. With the elimination of redevelopment agencies, this funding stream has disappeared completely. The loss of these precious funds means that millions of Californians affected by the state’s chronic housing shortage, including seniors, veterans, people experiencing chronic homelessness, working families, people with mental, physical, or developmental disabilities, agricultural workers, people exiting jails, prisons, and other state institutions, survivors of domestic violence, and former foster and transition-aged youth, will remain unhoused or living in substandard and unaffordable conditions. California desperately needs a permanent, ongoing source or sources of funding dedicated to affordable housing development. Such investment will create consistency and predictability in the affordable housing market, leverage billions of dollars in private investment, lessen demands on law enforcement and dwindling health care resources as fewer people are forced to live on the streets or in dangerous substandard buildings, and increase businesses’ ability to attract and retain skilled workers. In addition, a dedicated revenue source will allow a “pay as you go” approach, as opposed 2IILFHRI6HQDWRU0DUN'H6DXOQLHU 6%)DFW6KHHW 3DJH to issuing bonds that require additional interest costs. STATUS In the Senate Appropriations Committee. SUPPORT California Housing Consortium (sponsor) Housing California (sponsor) 8 past directors of the Department of Housing and Community Development AARP A&B Painting A Community of Friends Affirmed Housing Group Affordable Housing Associates Aging Services of California Alameda County Developmental Disability Council Alliance for Regional Solutions Alpha Construction Company AMCAL Multi-Housing Amy Hiestad Consulting Anderson and Associates Asian Pacific Environmental Network BAR Architects BAYC Berkeley Food and Housing Project Bernal Heights Neighborhood Center Bonita House Brayer Electric Company BRIDGE Housing Corporation BRC Advisors Building Futures with Women and Children Burbank Housing Corporation Burbank Housing Development Corporation Business Leaders Task Force Cabrillo Economic Development Corporation Cahill Contractors California Association of Housing Authorities California Association of Local Housing Finance Agencies California Association of Realtors California Association of Social Rehabilitation Agencies California Building Industry Association California Coalition for Rural Housing California Coalition for Youth California Housing Partnership Corporation California Infill Builders Association California Labor Federation California Rural Legal Assistance Foundation Calistoga Affordable Housing Caritas Management Corporation Center for Elders’ Independence Center for Sustainable Neighborhoods Center on Policy Initiatives Central Coast Residential Builders Century Housing Charities Housing Christian Church Homes City of Burbank City of Dublin City of Oakland City and County of San Francisco City of San Leandro City of Santa Monica City Heights Community Development Corporation Clifford Beers Housing CLUE-LA Collaborative Project Consulting Community Action to Fight Asthma Community Economics Community Corporation of Santa Monica Community Housing Opportunities Corporation Community Housing Partnership Community Housing Works Community Interfaith Services Comprehensive Child Development Core Companies Corporation for Supportive Housing Dahlin Group Architecture Planning Design Electric EAH Housing East Bay Asian Local Development Corporation East Bay Housing Organizations Economic and Planning Systems, Inc. Eden Housing Enterprise Community Partners Equity Community Builders Eugene Burger Management Corporation EveryOne Home First United Methodist Church of Los Angeles Fred Finch Youth Center Goldfarb Lipman Attorneys Greenbelt Alliance Habitat for Humanity California Habitat for Humanity East Bay 2IILFHRI6HQDWRU0DUN'H6DXOQLHU 6%)DFW6KHHW 3DJH Habitat for Humanity Greater Los Angeles Habitat for Humanity Greater San Francisco Hearth Homes Heffernan Insurance Brokers Housing Advisory Group Housing Consortium of the East Bay Housing Leadership Council of San Mateo County Housing Trust of Santa Clara County ICON Builders Interfaith Committee for Worker Justice of San Diego County Islamic Shura Council of Southern California Jacobs Center for Neighborhood Innovation Jamboree Housing Corporation John Burton Foundation for Children Without Homes Koning Eizenberg Architecture Larkin Street Youth Services Law Foundation of Silicon Valley League of Women Voters of California League of Women Voters of Marin County Leddy Maytum Stacy Architects LifeLong Medical Care LifeSTEPS Local Initiatives Support Corporation Bay Area Local Initiatives Support Corporation Los Angeles Los Angeles Business Council L.A Family Housing Many Mansions Marin Environmental Housing Collaborative Marin Partnership to End Homelessness Mental Health America of Los Angeles Mercy Housing MidPen Housing Mikiten Architecture Miller, Morton, Caillat, & Nevis Mill Valley Affordable Housing Committee Mogavero Notestine Associates Morley Builders Move LA Napa Valley Community Housing National Equity Fund National Housing Law Project National Youth Law Center Natural Resources Defense Council Neighborhood Housing Services Silicon Valley New Directions New Image Emergency Shelter for the Homeless Non-Profit Housing Association of Northern California North County Lifeline Opportunity Fund Northern California Orange County Business Council Palm Communities Palo Alto Housing Corporation Permacity Project Sentinel Pyatok Architects Public Advocates DRA Infill Coalition Regional Asthma Management and Prevention Related California Resources for Community Development Rural Community Assistance Corporation Sacramento Housing Alliance Sacramento Yolo Mutual Housing Association St. Anne’s St. Anthony Foundation St. Ignatius Parish, San Francisco St. John the Baptist Catholic Church of Baldwin Park San Diego Building Trades Council Family Housing Corporation San Diego City Councilman Todd Gloria San Diego Housing Federation San Diego LGBT Community Center San Diego Organizing Project San Gabriel Valley Housing and Homeless Coordinating Council San Luis Obispo County Housing Trust Fund Satellite Housing Self-Help Enterprises Shelter, Inc. Sierra Business Council Silicon Valley Leadership Group Sonoma County Task Force for the Homeless South County Housing Southern California Association of Non-Profit Housing Southern California Housing Collaborative Stand Up for Neighborly Novato State Building and Construction Trades Council of California Stocktonians Taking Action to Neutralize Drugs Sun Country Builders Sunseri Construction Tenderloin Neighborhood Development Corporation The Arc Treasure Island Homeless Development Initiative Ubuntu Green 2IILFHRI6HQDWRU0DUN'H6DXOQLHU 6%)DFW6KHHW 3DJH United Cerebral Palsy in California United Homeless Healthcare Partners Urban Habitat USA Properties Veterans Association of North County Walton Construction Services West Bay Housing Corporation Western Center on Law and Poverty Westport Construction Yolo Community Care Continuum OPPOSITION [NOTE: The California Association of Realtors has committed to support SB 1220 as amended on April 12 and April 16. It is anticipated that most or all of the following local Realtor associations will remove their opposition and possibly support the amended bill. It is further anticipated that the two taxpayer organizations, the bankers, mortgage bankers, land title association, and the county recorders will remain in opposition.] Amador County Association of Realtors Asian Real Estate Association of America Bakersfield Association of Realtors Berkeley Association of Realtors Beverly Hills/Greater Los Angeles Association of Realtors Big Bear Association of Realtors Burbank Association of Realtors Calaveras County Association of Realtors California Bankers Association California Land Title Association California Mortgage Bankers Association California Taxpayers Association Chico Association of Realtors Coastal Mendocino Association of Realtors Conejo Simi Moorpark Association of Realtors Contra Costa Association of Realtors County Recorders Association of California Del Norte Association of Realtors Delta Association of Realtors Desert Communities Association of Realtors Downey Association of Realtors El Dorado County Association of Realtors Fresno Association of Realtors Greater Antelope Valley Association of Realtors Howard Jarvis Taxpayers Association Humboldt Association of Realtors Idlyllwild Association of Realtors Imperial County Association of Realtors Inglewood Board of Realtors Inland Gateway Association of Realtors Kings County Board of Realtors Lodi Association of Realtors Malibu Association of Realtors Mammoth Lakes Board of Realtors Mariposa County Board of Realtors Merced County Association of Realtors Montebello District Board of Realtors Monterey County Association of Realtors Nevada County Association of Realtors North Bay Association of Realtors North San Diego County Association of Realtors Oakland Association of Realtors Ojai Valley Board of Realtors Orange County Association of Realtors Oroville Association of Realtors Pacific West Association of Realtors Pajaro Valley Association of Realtors Palm Springs Regional Association of Realtors Palos Verdes Peninsula Association of Realtors Paradise Association of Realtors Pasadena-Foothills Association of Realtors Paso Robles Association of Realtors Pismo Coast Association of Realtors Placer County Association of Realtors Plumas Association of Realtors Rancho Southeast Association of Realtors Sacramento Association of Realtors San Benito County Association of Realtors San Francisco Association of Realtors San Luis Obispo Association of Realtors San Mateo County Association of Realtors Santa Barbara Association of Realtors Santa Ynez Valley Association of Realtors Shasta Association of Realtors Silicon Valley Association of Realtors South Bay Association of Realtors Southland Regional Association of Realtors South Tahoe Association of Realtors Southwest Los Angeles Association of Realtors Southwest Riverside County Association of Realtors Sutter-Yuba Association of Realtors Tehachapi Area Association of Realtors Tulare County Association of Realtors 2IILFHRI6HQDWRU0DUN'H6DXOQLHU 6%)DFW6KHHW 3DJH Tuolumne County Association of Realtors Ventura County Coastal Association of Realtors Victor Valley Association of Realtors West Contra Costa Association of Realtors Yolo County Board of Realtors Yosemite Gateway Association of Realtors FOR MORE INFORMATION Mark Stivers Senate Transportation and Housing Committee (916) 651-4121 Mark.stivers@sen.ca.gov State Net | 2011 CA S 1220: Bill Analysis - Senate Trans & Housing Committee - 04/24/2012 2011 CA S 1220: Bill Analysis - Senate Trans & Housing Committee - 04/24/2012 BILL ANALYSIS SENATE TRANSPORTATION & HOUSING COMMITTEE SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: desaulnier VERSION: 4/16/12 Analysis by: Mark Stivers FISCAL: yes Hearing date: April 24, 2012 SUBJECT: Housing Opportunity and Market Stabilization (HOMeS) Trust Fund DESCRIPTION: This bill imposes a fee of $75 on the recording of each real-estate related document, except for those documents recorded in connection with a transfer subject to a documentary transfer tax, and directs the money to the Housing Opportunity and Market Stabilization (HOMeS) Trust Fund. The Legislature may then appropriate these funds for the development, acquisition, rehabilitation, and preservation of homes affordable to low- and moderate-income households, including emergency shelters, transitional and permanent rental housing, foreclosure mitigation, and homeownership opportunities. ANALYSIS: Current law establishes a number of programs at the Department of Housing and Community Development (HCD) and the California Housing Finance Agency (CalHFA) to make housing more affordable to California families and individuals, including the following mainline programs: Multifamily Housing Program, which funds the new construction, rehabilitation, and preservation of permanent and transitional rental homes for lower income households through loans to local governments, non-profit developers, and for-profit developers. Joe Serna, Jr. Farmworker Housing Program, which funds the development of ownership or rental homes for agricultural workers through grants to local governments and non-profit organizations. Emergency Housing Assistance Program, which funds emergency shelters and transitional homes for homeless individuals and families through grants to counties and non-profit entities for rehabilitation, renovation, expansion, site acquisition, and equipment. CalHome Program, which funds downpayment assistance, home rehabilitation, counseling, http://client2.statenet.com/secure/pe/resources....ALYSIS_comSTRH_vrd20120424_seq00&no_text_utils=1 (1 of 5) [5/2/2012 5:05:24 PM] State Net | 2011 CA S 1220: Bill Analysis - Senate Trans & Housing Committee - 04/24/2012 self-help mortgage assistance programs, and technical assistance for self-help and shared housing through grants and loans. California Homebuyer Downpayment Assistance Program, which aids first-time homebuyers with down payment and/or closing costs. Historically, the state has funded these programs through the sale of general obligations bonds. Most recently, the voters approved a $2.1 billion bond through Proposition 46 in 2002 and then $2.85 billion through Proposition 1C in 2006. HCD has awarded almost all of the funds made available under these propositions, particularly in these mainline programs. Until 2011, the Community Redevelopment Law required redevelopment agencies to set aside 20% of all tax increment revenue to increase, improve, and preserve the community's supply of low and moderate income housing available at an affordable housing cost. In fiscal year 2009/10, redevelopment agencies deposited $1.075 billion of property tax increment revenues into their Low and Moderate-Income Housing Funds. With the elimination of redevelopment agencies, this source of funding for affordable housing is no longer available. This bill imposes a fee of $75 on the recording of each real-estate related document, except for those documents recorded in connection with a transfer subject to a documentary transfer tax, and directs the money to the HOMeS Trust Fund. The Legislature may then appropriate these funds for the development, acquisition, rehabilitation, and preservation of homes affordable to low- and moderate-income households, including emergency shelters, transitional and permanent rental housing, foreclosure mitigation, and homeownership opportunities. The bill further requires HCD to report annually on the expenditure of these funds and requires the Bureau of State Audits to conduct periodic audits to ensure that departments award appropriated funds in a timely fashion and consistent with legal requirements. COMMENTS: 1. Purpose of the bill. According to the author, having a healthy housing market that provides an adequate supply of homes affordable to families and individuals at all income levels is critical to the economic prosperity and quality of life in California. The decline in housing production has played a significant role in creating and prolonging the Great Recession. The lack of sufficient, affordable homes near jobs impedes economic growth and development by making it difficult for California employers to attract and retain employees. Moreover, continued affordability gaps mean that California has the second lowest homeownership rate in the nation, that minimum wage earners have to work 120 hours per week to afford the average two bedroom rental apartment, and that California has the largest population of homeless persons in the nation. The exhaustion of bond funds and the elimination of redevelopment agencies means that millions of Californians affected by the state's chronic housing shortage, including seniors, veterans, people experiencing chronic homelessness, working families, people with mental, physical, or developmental disabilities, agricultural workers, people exiting jails, prisons, and other state institutions, survivors of domestic violence, and former foster and transition-aged youth, will remain unhoused or living in substandard and unaffordable conditions. California desperately needs a permanent, ongoing source or sources of funding dedicated http://client2.statenet.com/secure/pe/resources....ALYSIS_comSTRH_vrd20120424_seq00&no_text_utils=1 (2 of 5) [5/2/2012 5:05:24 PM] State Net | 2011 CA S 1220: Bill Analysis - Senate Trans & Housing Committee - 04/24/2012 to affordable housing development. Such investment will create consistency and predictability in the affordable housing market, leverage billions of dollars in private investment, lessen demands on law enforcement and dwindling health care resources as fewer people are forced to live on the streets or in dangerous substandard buildings, and increase businesses' ability to attract and retain skilled workers. In addition, a dedicated revenue source will allow a "pay as you go" approach, as opposed to issuing bonds that require additional interest costs. 2. Exempts documents related to sale transactions. In order to promote homeownership opportunities, this bill exempts documents made in connection with the sale of real property from the new fee. This will ensure that transaction costs do not increase for homebuyers. 3. Revenue projections. Based on recording data from a variety of past years, it is estimated that this bill will generate an average of $525 million per year for the HOMeS Trust Fund, ranging from $300 million per year in low-volume years to $750 million per year in high- volume years. 4. Allocation to be determined. This bill requires that monies in the HOMeS Trust Fund go for the development, acquisition, rehabilitation, and preservation of homes affordable to low- and moderate-income households, including emergency shelters, transitional and permanent rental housing, foreclosure mitigation, and homeownership opportunities. Aside from these general parameters, however, this bill does not allocate funds to particular programs or uses. Instead, it leaves the decision on allocation to the Legislature each year as part of the budget process. This provides less certainty but ensures that funds can address priority housing needs as they change through the years. Nonetheless, it is the author's intent that these monies fund a variety of housing needs, ranging from homeless shelters to rental housing to homeownership, and, where possible, use established and well-understood programs. In addition to funding statewide programs, the Legislature could also designate a portion of the funds as block grants for cities and counties that meet certain thresholds. 5. Types of documents covered. This bill applies the $75 fee to the recording of all real estate-related documents except those recorded in connection with a transfer subject to the imposition of a documentary transfer tax and those expressly exempted from payment of recording fees. There are many types of documents that fall under the proposed fee, including, but not limited to: Deeds Grant deeds Trustee's deeds Deeds of trust Reconveyances Quit claim deeds Fictitious deeds of trust Assignments of deeds of trust Requests for notice of default Abstracts of judgment Subordination agreements Declarations of homestead Abandonments of homestead Notices of default Releases or discharges Easements Notices of trustee sale Notices of completion Mechanic's liens Maps Covenants, conditions, and restrictions 1. Two-thirds vote required. Legislative Counsel has determined that this bill would result in a change in state taxes for the purpose of increasing state revenues within the meaning of Section 3 of Article XIIIA of the California Constitution and thus requires a 2/3 vote for passage. 2. Arguments in opposition. The California Taxpayers Association argues that the fee is unreasonable and that funding for low-income housing should not be placed on the backs of people trying to record documents. The Howard Jarvis Taxpayers Association believes that this is the wrong time to increase taxes against struggling California families already suffering http://client2.statenet.com/secure/pe/resources....ALYSIS_comSTRH_vrd20120424_seq00&no_text_utils=1 (3 of 5) [5/2/2012 5:05:24 PM] State Net | 2011 CA S 1220: Bill Analysis - Senate Trans & Housing Committee - 04/24/2012 through the highest foreclosure rates in 70 years. It cites research ranking California as 14th among the states in combined state and local per capita property taxes and believes that existing taxes on property are already excessive. The County Recorders Association of California writes that the new fee places additional financial burdens at the expense of ordinary Californians and will result in significant increases in staff time to collect fees and address unsatisfied customers. The committee also received 73 letters of opposition from local realtor boards based on the introduced version of the bill. With the recent amendments to the bill that won the support of the California Association of Realtors, it is assumed that these letters are no longer current. 3. Double referral. The Rules Committee has referred this bill to both this committee and the Governance and Finance Committee. Because the Governance and Finance Committee is scheduled to hear this bill on April 25, the author should take any amendments agreed to in this committee in the Governance and Finance Committee. POSITIONS: (Communicated to the committee before noon on Wednesday, April 18, 2012) SUPPORT: California Housing Consortium (sponsor) Housing California (sponsor) AARP A&B Painting Affirmed Housing Group Affordable Housing Associates Aging Services of California Alameda County Developmental Disability Council Alliance for Regional Solutions Alpha Construction Company AMCAL Multi-Housing Anderson and Associates Asian Pacific Environmental Network BAR Architects BAYC Berkeley Food and Housing Project Bernal Heights Neighborhood Center Bonita House Brayer Electric Company BRC Advisors Building Futures with Women and Children Burbank Housing Corporation Burbank Housing Development Corporation Business Leaders Task Force Cabrillo Economic Development Corporation Cahill Contractors California Association of Housing Authorities California Association of Local Housing Finance Agencies California Association of Realtors California Building Industry Association California Coalition for Rural Housing California Coalition for Youth California Housing Partnership Corporation California Infill Builders Association California Labor Federation California Rural Legal Assistance Foundation Calistoga Affordable Housing Caritas Management Corporation Center for Sustainable Neighborhoods Center on Policy Initiatives Central Coast Residential Builders Century Housing Charities Housing Christian Church Homes City of Dublin City of Oakland City of San Leandro City Heights Community Development Corporation Clifford Beers Housing CLUE- LA Collaborative Project Consulting Community Action to Fight Asthma Community Economics Community Corporation of Santa Monica Community Housing Opportunities Corporation Community Housing Partnership Community Housing Works Community Interfaith Services Community of Friends Core Companies Corporation for Supportive Housing Dahlin Group Architecture Planning EAH Housing East Bay Asian Local Development Corporation East Bay Housing Organizations Eden Housing Enterprise Community Partners Equity Community Builders Eugene Burger Management Corporation EveryOne Home First United Methodist Church of Los Angeles Fred Finch Youth Center Goldfarb Lipman Attorneys Greenbelt Alliance Habitat for Humanity California Habitat for Humanity East Bay Habitat for Humanity Greater Los Angeles Habitat for Humanity Greater San Francisco Hearth Homes Heffernan Insurance Brokers Housing Advisory Group Housing Consortium of the East Bay Housing Leadership Council of San Mateo County Housing Trust of Santa Clara County ICON Builders Interfaith Committee for Worker Justice of San Diego County Islamic Shura Council of Southern California Jacobs Center for Neighborhood Innovation Jamboree Housing Corporation John Burton Foundation for Children Without Homes Koning Eizenberg Architecture Larkin Street http://client2.statenet.com/secure/pe/resources....ALYSIS_comSTRH_vrd20120424_seq00&no_text_utils=1 (4 of 5) [5/2/2012 5:05:24 PM] State Net | 2011 CA S 1220: Bill Analysis - Senate Trans & Housing Committee - 04/24/2012 Youth Services Law Foundation of Silicon Valley League of Women Voters of California League of Women Voters of Marin County Leddy Maytum Stacy Architects LifeLong Medical Care LifeSTEPS LISC Bay Area Los Angeles Business Council L.A Family Housing Many Mansions Marin Environmental Housing Collaborative Marin Partnership to End Homelessness Mental Health America of Los Angeles Mercy Housing MidPen Housing Mikiten Architecture Mill Valley Affordable Housing Committee Morley Builders Move LA Napa Valley Community Housing National Equity Fund Natural Resources Defense Council Neighborhood Housing Services Silicon Valley New Directions Non-Profit Housing Association of Northern California North County Lifeline Opportunity Fund Northern California Orange County Business Council Palm Communities Project Sentinel Pyatok Architects Public Advocates DRA Infill Coalition Regional Asthma Management and Prevention Related California Resources for Community Development Rural Community Assistance Corporation Sacramento Housing Alliance Sacramento Yolo Mutual Housing Association St. Anne's St. Anthony Foundation St. Ignatius Parish, San Francisco San Diego Building Trades Council Family Housing Corporation San Diego Housing Federation San Diego LGBT Community Center San Gabriel Valley Housing and Homeless Coordinating Council San Luis Obispo County Housing Trust Fund Satellite Housing Self-Help Enterprises Shelter, Inc. Sierra Business Council Silicon Valley Leadership Group South County Housing Southern California Association of Non-Profit Housing Stand Up for Neighborly Novato State Building and Construction Trades Council of California Stocktonians Taking Action to Neutralize Drugs Sun Country Builders Sunseri Construction Treasure Island Homeless Development Initiative United Homeless Healthcare Partners USA Properties Veterans Association of North County Walton Construction Services West Bay Housing Corporation Western Center on Law and Poverty Westport Construction Yolo Community Care Continuum OPPOSED: California Bankers Association California Land Title Association California Mortgage Bankers Association California Taxpayers Association County Recorders Association of California Howard Jarvis Taxpayers Association Copyright (c) 2012 State Net. All rights reserved. http://client2.statenet.com/secure/pe/resources....ALYSIS_comSTRH_vrd20120424_seq00&no_text_utils=1 (5 of 5) [5/2/2012 5:05:24 PM] AMENDED IN SENATE APRIL 16, 2012 AMENDED IN SENATE APRIL 12, 2012 SENATE BILL No. 1220 1 2 3 Introduced by Senators DeSaulnier and Steinberg (Principal coauthor: Assembly Member Atkins) (Coauthors: Senators Leno and Rubio) February 23, 2012 1 2 3 An act to add Section 27388.1 to the Government Code, and to add Chapter 2.5 (commencing with Section 50470) to Part 2 of Division 31 of the Health and Safety Code, relating to housing. legislative counsel’s digest SB1220, as amended, DeSaulnier.Housing Opportunity and Market Stabilization (HOMeS) Trust Fund Act of 2012. Under existing law, there are programs providing assistance for, among other things, emergency housing, multifamily housing, farmworker housing, home ownership for very low and low-income households, and downpayment assistance for first-time homebuyers. Existing law also authorizes the issuance of bonds in specified amounts pursuant to the State General Obligation Bond Law. Existing law requires that proceeds from the sale of these bonds be used to finance various existing housing programs, capital outlay related to infill development, brownfield cleanup that promotes infill development, and housing-related parks. This bill would enact the Housing Opportunity and Market Stabilization (HOMeS) Trust Fund Act of 2012. The bill would make legislative findings and declarations relating to the need for establishing permanent, ongoing sources of funding dedicated to affordable housing development. The bill would impose a fee, except as provided, of $75 97 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. By imposing new duties on counties with respect to the imposition of the recording fee, the bill would create a state-mandated local program. The bill would require that revenues from this fee be sent quarterly to the Department of Housing and Community Development for deposit in the Housing Opportunity and Market Stabilization (HOMeS) Trust Fund, which the bill would create within the State Treasury. The bill would provide that moneys in the fund may be expended for the purpose of supporting affordable housing, as specified. The bill would impose certain auditing and reporting requirements. This bill would result in a change in state taxes for the purpose of increasing state revenues within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2⁄3 of the membership of each house of the Legislature. 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. Vote: 2⁄3. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. The people of the State of California do enact as follows: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 SECTION 1. This act shall be known as the Housing Opportunity and Market Stabilization (HOMeS) Trust Fund Act of 2012. SEC. 2. The Legislature finds and declares that having a healthy housing market that provides an adequate supply of homes affordable to Californians at all income levels is critical to the economic prosperity and quality of life in the state. The Legislature further finds and declares all of the following: (a) Funding approved by the state’s voters in 2002 and 2006, as of June 2011, has financed the construction, rehabilitation, and preservation of over 11,600 shelter spaces and 57,220 affordable apartments, including 2,500 supportive homes for people experiencing homelessness. In addition, these funds have helped 57,290 families become or remain homeowners. Nearly all of the 97 — 2 —SB 1220 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 voter-approved funding for affordable housing was awarded by the beginning of 2012. (b) The requirement in the Community Redevelopment Law that redevelopment agencies set aside 20 percent of tax increment for affordable housing generated roughly one billion dollars ($1,000,000,000) per year. With the elimination of redevelopment agencies, this funding stream has disappeared. (c) California has 12 percent of the United States population but 21.4 percent of its homeless population. Seventy-three percent of people experiencing homelessness in California fell into it because they could not afford a place to live. Sixty-two percent of homeless Californians are unsheltered, 14 percent are veterans, and 20 percent are families. (d) Furthermore, 4 of the top 10 metropolitan areas in the country for homeless are in the following metropolitan areas in California: San Jose-Sunnyvale-Santa Clara, Los Angeles-Long Beach-Santa Ana, Fresno, and Stockton. (e) California continues to have the second lowest homeownership rate in the nation, and minimum wage earners have to work 120 hours per week to afford the average two-bedroom apartment. (f) Millions of Californians are affected by the state’s chronic housing shortage, including seniors, veterans, people experiencing chronic homelessness, working families, people with mental, physical, or developmental disabilities, agricultural workers, people exiting jails, prisons, and other state institutions, survivors of domestic violence, and former foster and transition-aged youth. (g) While the current credit and foreclosure crisis has resulted in reductions in home prices in some areas, it has increased pressure on the rental housing market and slowed new housing production of all types, exacerbating the mismatch between the ever increasing number of households that need housing they can afford and the supply. (h) California’s workforce continues to experience longer commute times as persons in the workforce seek affordable housing outside the areas in which they work. If California is unable to support the construction of affordable housing in these areas, congestion problems will strain the state’s transportation system and exacerbate greenhouse gas emissions. 97 SB 1220 — 3 — 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 (i) Many economists agree that the state’s unemployment rate of over 11 percent is due in large part to massive shrinkage in the construction industry from 2005 to 2009, including losses of nearly 700,000 construction-related jobs, a 60-percent decline in construction spending, and an83-percent reduction in residential permits. Restoration of a healthy construction sector will significantly reduce the state’s unemployment rate. (j) The lack of sufficient housing impedes economic growth and development by making it difficult for California employers to attract and retain employees. (k) To keep pace with continuing demand, the state should identify and establish a permanent, ongoing source or sources of funding dedicated to affordable housing development. Without a reliable source of funding for housing affordable to the state’s workforce and most vulnerable residents, the state and its local and private housing development partners will not be able to continue increasing the supply of housing after existing housing bond resources are depleted. (l) The investment will leverage billions of dollars in private investment, lessen demands on law enforcement and dwindling health care resources as fewer people are forced to live on the streets or in dangerous substandard buildings, and increase businesses’ ability to attract and retain skilled workers. (m) In order to promote housing and homeownership opportunities, the recording fee imposed by this act should not be applied to any recordings made in connection with a sale of real property. Purchasing housing is likely the largest purchase made by Californians, and it is the intent of this act not to increase transaction costs associated with these transfers. SEC. 3. Section 27388.1 is added to the Government Code, to read: 27388.1. (a) (1) Except as provided in paragraph (2), in addition to any other recording fees specified in this code, a fee of seventy-five dollars ($75) shall be paid at the time of recording of every real estate instrument, paper, or notice required or permitted by law to be recorded except those expressly exempted from payment of recording fees. “Real estate instrument” includes, but is not limited to, the following documents: deed, grant deed, trustee’s deed, deed of trust, reconveyance, quit claim deed, fictitious deed of trust, assignment of deed of trust, request for 97 — 4 —SB 1220 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 notice of default, abstract of judgment, subordination agreement, declaration of homestead, abandonment of homestead, notice of default, release or discharge, easement, notice of trustee sale, notice of completion, UCC financing statement, mechanic’s lien, maps, and covenants, conditions, and restrictions. (2) The fee described in paragraph (1) shall not be imposed at the time of recording of on any real estate instrument, paper, or notice recorded in connection with a transfer subject to the imposition of a documentary transfer tax as defined in Section 11911 of the Revenue and Taxation Code. (b) The fees, after deduction of any actual and necessary administrative costs incurred by the county in carrying out this section, shall be sent quarterly to the Department of Housing and Community Development for deposit in the Housing Opportunity and Market Stabilization (HOMeS) Trust Fund established by Section 50471 of the Health and Safety Code to be expended for the purposes set forth in that section. In addition, the county shall pay to the Department of Housing and Community Development interest, at the legal rate, on any funds not paid to the Controller within 30 days of the end of a quarter. SEC. 4. Chapter 2.5 (commencing with Section 50470) is added to Part 2 of Division 31 of the Health and Safety Code, to read: Chapter 2.5. Housing Opportunity and Market Stabilization (HOMeS) Trust Fund Article 1. General Provisions 50470. This chapter shall be known, and may be cited, as the Housing Opportunity and Market Stabilization (HOMeS) Trust Fund Act of 2012. 50471. (a) There is hereby created in the State Treasury the Housing Opportunity and Market Stabilization (HOMeS) 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. Moneys in the Housing Opportunity and Market Stabilization (HOMeS) 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 97 SB 1220 — 5 — 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 to the Surplus Money Investment Fund. Upon appropriation by the Legislature, moneys in the fund may be expended for the purpose of supporting the development, acquisition, rehabilitation, and preservation of housing affordable to low- and moderate-income households, including, but not limited to, emergency shelters; transitional and permanent rental housing, including necessary service and operating subsidies; foreclosure mitigation; and homeownership opportunities. (b) 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. Article 2. Audits and Reporting 50475. The Bureau of State Audits shall conduct periodic audits to ensure that the annual allocation to individual programs is awarded by the department in a timely fashion consistent with the requirements of this chapter. The first audit shall be conducted no later than 24 months from the effective date of this section. 50476. In its annual report to the Legislature pursuant to Section 50408, the department shall report how funds that were made available pursuant to this chapter and allocated in the prior year were expended. The department shall make the report available to the public on its Internet Web site. SEC. 5. No reimbursement is required by this act pursuant to Section 6 of Article XIIIB 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. O 97 — 6 —SB 1220