No fiscal impact to the County from supporting these bills.
At its May 8, 2017 meeting, the Legislation Committee voted unanimously to recommend positions to the Board of Supervisors on the following bills as follows:
|
|
Bill & Link |
Author |
Title |
Summary |
Position |
|
1 |
AB 60 |
Santiago |
Subsidized child care and development services |
Provides for changes to eligibility determination and redetermination for subsidized child care |
Support |
|
2 |
AB 271 |
Caballero |
Property Assessed Clean Energy program |
Makes changes to the statutes which govern unpaid Property Assessed Clean Energy (PACE) assessments. |
Support |
|
3 |
AB 1520 |
Burke |
Lifting Children and Families Out of Poverty Act |
Establishes the Lifting Children and Families Out of Poverty Task Force, consisting of specified stakeholders, for purposes of researching, analyzing, and providing guidance to the Legislature in making appropriations pursuant to the framework and in supporting State's efforts on lifetime wellness, self-sufficiency, and economic strength in families and communities throughout the state. |
Support |
|
4 |
HR 1921 |
Banks |
Prekindergarten Education Block Grants |
Amends the Head Start Act; authorizes block grants to states for prekindergarten education. |
Oppose |
|
5 |
S. 815 |
Lee |
Prekindergarten Education Block Grants |
Amends the Head Start Act; authorizes block grants to states for prekindergarten education. |
Oppose
|
2017 CA A 60: Bill Analysis - 05/27/2017 - Assembly Floor
ASSEMBLY THIRD READING
AB 60
(Santiago and Gonzalez)
As Introduced December 7, 2016
Majority vote
Committee Votes Ayes Noes
Human Services 7-0 Rubio, Choi,
Arambula,
Gonzalez
Fletcher,
Maienschein,
Mark Stone,
Thurmond
Appropriations 17-0 Gonzalez
Fletcher,
Bigelow, Bloom,
Bocanegra,
Bonta,
Brough,
Calderon,
McCarty, Quirk,
Fong, Friedman,
Gallagher,
Eduardo Garcia,
Gray,
Muratsuchi,
Obernolte, Reyes
SUMMARY: Provides for changes to eligibility determination and redetermination for subsidized child care. Specifically, this bill:
1) Requires a family, upon establishing initial or ongoing eligibility for subsidized child care services, as specified, to:
a) Be considered to meet all eligibility requirements for a period of not less than 12 months, unless the family established eligibility on the basis of seeking employment, as specified;
b) Receive subsidized child care services for not less than 12 months prior to having their eligibility redetermined, unless the family established eligibility on the basis of seeking employment, as specified; and
c) Not be required to report changes to income or other changes for at least 12 months, unless the family attains an income that exceeds the threshold for ongoing eligibility, as specified, at which point a family must report increases in income that exceed this threshold and their ongoing eligibility for services would be redetermined.
2) Requires a family that establishes initial eligibility on the basis of seeking employment to receive services for not less than six months and further requires a family that establishes ongoing eligibility on the basis of seeking employment to receive services for six additional months unless the family becomes otherwise eligible, as specified.
3) Permits a family to, at any time, voluntarily report income or other changes for purposes of reducing a family's fees, increasing a family's subsidy, or extending the period of the family's eligibility prior to redetermination.
4) Prohibits a payment made by a child development program for a child during an eligible family's period of continuous eligibility from being considered an error or an improper payment due to the family's circumstances during that period, as specified, but permits the state or its designated agent to seek to recover payments that are the result of fraud.
5) Permits the California Department of Education (CDE) to implement certain provisions of this bill related to continuous eligibility through management bulletins or similar letters of instruction until regulations are filed with the Secretary of State and further, requires CDE to convene a workgroup of specified stakeholders to develop recommendations for implementing continuous eligibility prior to initiating a rulemaking action by December 31, 2018, as specified.
6) Specifies that, for purposes of establishing initial income eligibility for subsidized child care services, "income eligible" means that a family's adjusted monthly income is at or below 70% of the state median income (SMI) based on the most recent data published by the United States Census Bureau for a family of the same size.
7) Defines, for purposes of establishing ongoing income eligibility for subsidized child care services, "ongoing income eligible" to mean that a family's adjusted monthly income is at or below 85% of the SMI based on the most recent data published by the United States Census Bureau for a family of the same size.
8) Authorizes any family that receives first priority for subsidized child care services, as specified, to be exempt from family fees for up to 12 months.
9) Makes technical amendments, including removing provisions that specify or refer to eligibility determination thresholds and periods that conflict with the provisions contained in this bill.
EXISTING LAW:
1) Establishes the Child Care and Development Services Act to provide child care and development services as part of a coordinated, comprehensive, and cost-effective system serving children from birth to 13 years old and their parents, and including a full range of supervision, health, and support services through full- and part-time programs. (Education Code (EDC) 8200 et seq.)
2) Defines "child care and development services" to mean services designed to meet a wide variety of children's and families' needs while parents and guardians are working, in training, seeking employment, incapacitated, or in need of respite. (EDC 8208)
3) States the intent of the Legislature that all families have access to child care and development services, through resource and referral where appropriate, and regardless of demographic background or special needs, and that families are provided the opportunity to attain financial stability through employment, while maximizing growth and development of their children, and enhancing their parenting skills through participation in child care and development programs. (EDC 8202)
4) Requires the Superintendent of Public Instruction to administer general child care and development programs to include, among other things as specified, age- and developmentally-appropriate activities, supervision, parenting education and involvement, and nutrition. Further allows such programs to be designed to meet child-related needs identified by parents or guardians, as specified. (EDC 8240 and 8241)
5) To allow for maximum parental choice, authorizes the operation of Alternative Payment Programs (APPs) and provision of alternative payments and support services to parents and child care providers by local government agencies or non-profit organizations that contract with CDE. (EDC 8220)
6) Establishes rules and requirements for APPs and providers, as contracted agencies with CDE, to observe, including but not limited to accounting and auditing requirements, attendance monitoring requirements, referral requirements where applicable, and reimbursement and payment procedures. (EDC 8220 et seq.)
7) Requires the Superintendent of Public Instruction to adopt rules and regulations regarding eligibility, enrollment, and priority of services. (EDC 8263)
8) Requires the Superintendent to adopt rules, regulations, and guidelines to facilitate funding and reimbursement procedures for subsidized child care. (EDC 8269)
9) Requires the Superintendent to establish a family fee schedule for subsidized child care, as specified, contingent on income and subject to a cap. (EDC 8273)
FISCAL EFFECT: According the Assembly Appropriations Committee:
Staff notes that both the Assembly and Senate Budget Subcommittees provided $20 million in ongoing General Fund to update the state's outdated income eligibility requirements for subsidized child care and preschool, similar to the provisions of this bill.
1) Unknown costs, potentially $1 million to $5 million (General Fund) annually, for CalWORKS Stage 2 and Stage 3, to provide eligibility for services for 12 months, despite changes in family circumstances, due to less program attrition. This assumes between 2% and 10% of the existing number of children leaving childcare each month would instead continue under this bill;
2) Significant increase in cost pressure for capped child care programs. Providing guaranteed eligibility for 12 months results in longer waitlists for programs that have a capped number of slots due to children remaining in programs despite changes in income or need that would have otherwise caused them to become ineligible, thus freeing up a slot for a waiting family. This bill further reduces program attrition in out years by increasing the ongoing income eligibility threshold. It also allows more families to qualify for services by updating the initial income eligibility threshold, thereby adding families to existing waitlists;
3) One-time administrative costs of approximately $60,000 (General Fund) over an 18 month timeline to CDE to update regulations; and
4) State and local administrative workload could be reduced due to less paperwork related to reporting changes that affect eligibility.
COMMENTS:
Subsidized child care: California's subsidized child care system is designed to provide assistance to parents and guardians who are working, in training, seeking employment, incapacitated, or in need of respite. This child care is available through a number of programs; additionally, California offers State Preschool Programs to eligible three-and four-year-olds.
Parents participating in CalWORKs, as well as families transitioning off of and no longer receiving CalWORKs aid, can be eligible for child care, which is offered in three "stages." DSS administers Stage 1, and CDE administers Stages 2 and 3. CDE also administers non-CalWORKs child care. The largest programs are: General Child Care, which includes contracted centers and family child care homes; the California State Preschool Program, which provides developmentally, culturally, and linguistically appropriate curriculum to eligible three- and four-year olds; and APPs, which provide vouchers that can be used to obtain child care in a center, family child care home, or from a license-exempt provider. Waitlists for non-CalWORKs child care are common.
Families are typically eligible for subsidized child care if their income is less than 70% of the 2007-08 State Median Income (about $42,000 per year for a family of 3), if the parents have a need related to work, training, or education, and if the children are up to 12 years old (or 21 years old for youth with exceptional needs). The current income ceiling for a family of 3 is $3,518 per month ($42,216 per year).
The Superintendent of Public Instruction is required to establish a fee schedule whereby families may be charged a "family fee" depending on their income. For a family of 3, for example, subsidized child care remains at no cost for families earning less than $1,950 per month. However, with incomes between $1,950 a month and the monthly income ceiling of $3,518, a family fee is charged, the amount of which increases with income, but never to surpass 10% of a family's income. For a family of three with a monthly income of $1,950, the family fee per month for full-time care is $42; for a family of three earning $3,518 per month, this fee is $345.
Across the various subsidized child care programs, there are estimated to be over 190,000 slots (not including State Preschool). State Preschool contains over 163,000 additional slots.
Minimum wage increases: SB 3 (Leno), Chapter 4, Statutes of 2016, among other things, adopted increases to the state minimum wage. These increases are to take place in specific increments over a period of six years and then according to an adjustment factor each year afterwards, with the increases beginning January 1, 2017, for employers with 26 or more employees and beginning January 1, 2018, for employers with 25 or fewer employees. By 2023, the minimum wage for all covered employees will be at least $15 per hour.
Need for this bill: Many working families face a conundrum when it comes to child care: it is essential to parents being able to work outside of the home, yet child care can be costly - in essence, reducing wages earned. For low-income workers, this dilemma can be stark. Consider a family where both parents work full-time, year-round and earn the minimum wage of $10.50 per hour, bringing in a total pre-tax household income of $43,860 per year. If this family had one preschool-age child placed in a family child care home at the 2014 (the most data recent available) average cost in California for this type of care ($7,850 per year), the family would be paying 18% of their pre-tax income on care. If this family had an infant placed in a child care center at average 2014 rates? They would be paying $13,327 per year - 30% of their pre-tax income. Yet this family, with an annual income of $43,860, would not qualify for subsidized child care because they earned too much to be eligible per current law.
According to the author:
"Currently, burdensome child care reporting rules in California cause eligible families to churn between child care programs and long waiting lists for the programs. Churning disrupts children's school readiness and development; makes it impossible for child care providers to balance ledgers or plan for quality investments; and burdens employers and education providers to sign off on endless paperwork.
The increase in state minimum wage is a great achievement for California, but it's still not enough to afford child care, the very thing that enables families to work. [This bill] ensures that children can stay in the child care they love for as long as their families need it and keeps them working. This measure will help eligible families achieve stability by eliminating punitive interim reporting requirements that keep eligible families from losing their child care. It also defrosts the income guidelines that have been frozen for over a decade and creates a pathway out of poverty for families. With continuous child care, children will learn in a healthy, stable environment, and develop the skills they need for Kindergarten. Moreover, stable child care helps child care providers plan for quality improvements to their programs and allows them to keep serving families."
PRIOR LEGISLATION:
AB 2150 (Santiago) of 2016, was substantially similar to this bill. It died in the Senate Appropriations Committee.
SB 3 (Leno), Chapter 4, Statutes of 2016, among other things, adopted increases to the state minimum wage.
Analysis Prepared by: Daphne Hunt / HUM. S. / (916) 319-2089 FN: 0000644
2017 CA A 271: Bill Analysis - 05/25/2017 - Assembly Floor
ASSEMBLY THIRD READING
AB 271
(Caballero)
As Amended May 10, 2017
Majority vote
Committee Votes Ayes Noes
Local Government 7-2 Aguiar-Curry, Lackey, Ridley-
Waldron, Bloom, Thomas
Caballero,
Gonzalez
Fletcher,
Grayson, Voepel
Revenue & 9-1 Brough, Travis Ridley-Thomas
Taxation Allen,
Bocanegra,
Burke, Chen,
Dababneh,
Gipson, Mullin,
Quirk
Appropriations 17-0 Gonzalez
Fletcher,
Bigelow, Bloom,
Bocanegra,
Bonta, Brough,
Gloria, Chau,
Quirk, Fong,
Friedman,
Gallagher,
Eduardo Garcia,
Jones-Sawyer,
Muratsuchi,
Obernolte, Reyes
SUMMARY: Makes changes to the statutes which govern unpaid Property Assessed Clean Energy (PACE) assessments. Specifically, this bill:
1) Authorizes a county tax collector to direct the county auditor to remove any delinquent installment from the county's tax rolls. Provides that this bill only applies to a delinquent installment based on a voluntary contractual assessment, voluntary tax, or special tax that arises from a contract entered into on or after January 1, 2018, pursuant to existing law which governs contractual voluntary assessments and Mello-Roos special taxes which provide the authorization for Property Assessed Clean Energy (PACE) programs.
2) Requires the county tax collector, immediately upon the removal pursuant to 1), above, to provide notice on the tax rolls that the delinquent installment has been removed.
3) Requires the notice to be displayed on the secured tax roll in the manner that conveys that the removal has occurred and may include the name and telephone number of the person or entity to be contacted to receive further information.
4) Defines "PACE assessment" to mean a voluntary contractual assessment or voluntary special tax that arises from a contract entered into on or after January 1, 2018, pursuant to statutes in existing law which govern contractual voluntary assessments and Mello-Roos special taxes which provide the financing authorization for PACE programs.
5) Requires for a property subject to a PACE assessment that accrues a penalty pursuant to existing law which governs unpaid property taxes that become delinquent and defaulted and are subject to specified penalties, that accrued penalty applicable to the PACE assessment, when collected by the tax collector, to be deposited in a restricted county fund created pursuant to 9), below.
6) Requires any party other than the tax collector to remit the penalty to the tax collector within 30 days for deposit in the restricted county fund created pursuant to 9), below.
7) Prohibits a property subject to a PACE assessment, except as provided in 8), below, from being subject to an agreement wherein the authority to collect a defaulted lien based on a PACE assessment is transferred to, subject to, or contingent upon, third-party approval or another arrangement or agreement by the lienholder, unless that lien has been removed from the county's tax rolls and the right to collect the PACE assessment and any defaulted lien amount is returned to the holder of the PACE lien.
8) Provides that the prohibition in 7), above, does not apply to a PACE assessment made subject to, on or before January 1, 2018, a contractual waiver of the right to foreclose, or other arrangement or agreement between a lienholder and a lender, or a lienholder and another third party, wherein the agreement requires approval by the other party prior to the lienholder's exercise of foreclosure.
9) Requires the county to create a restricted fund to receive moneys described in 5) and 6), above, and requires moneys in the fund to be transferred to the delinquent tax sale trust fund for the deficit amount to be distributed pursuant to existing law for any property subject to a PACE assessment is sold at a tax-defaulted land sale for less than the minimum price described in existing law.
10) Prohibits a PACE assessment removed from a county's tax rolls, pursuant to this bill, from accruing further penalties and interest in existing law for delinquent assessments.
11) Provides that, if the Commission on State Mandates determines that this bill contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made, pursuant to current laws governing state mandated local costs.
FISCAL EFFECT: According to the Assembly Appropriations Committee, this bill contains minor costs to county tax collectors to carry out the provisions of this bill. While these costs are potentially reimbursable, it is unlikely a county would incur enough cost to make a claim to the Commission on State Mandates. In addition, costs incurred from administering the PACE program are recoverable from a third party under other provisions of law.
COMMENTS:
1) History and Statutory Authorization. Utilizing the authority to create a financing district as a charter city, the City of Berkeley, in 2007, established a citywide voluntary program to allow residential and commercial property owners to install solar energy systems and make energy efficiency improvements to their buildings and to repay the cost over 20 years via an assessment on the property tax bill. In 2008, the Legislature granted the statutory authority to cities and counties to provide up-front financing to property owners to install renewable energy sources or energy efficiency improvements that are permanently fixed to their properties, which is repaid through the property tax bill.
Most PACE programs are implemented and administered under two statutory frameworks:
AB 811 (Levine), Chapter 159, Statutes of 2008, which amended the Improvement Act of 1911, to allow for voluntary contractual assessments to finance PACE projects, and SB 555 (Hancock), Chapter 493, Statutes of 2011, which amended the Mello-Roos Community Facilities District Act to allow for Mello-Roos special taxes (parcel taxes) to finance PACE projects.
The Legislature has expanded PACE for residential and commercial property owners as an option to pay for renewable energy upgrades, energy and water efficiency retrofits, seismic improvements, and other specified improvements for their homes or buildings. Local agencies create PACE assessment districts under AB 811 or establish a Community Facilities District (CFD) under SB 555, allowing the local agency to issue bonds to finance the up-front costs of improvements. In turn, property owners enter into a voluntary contractual assessment agreement with the local agency or agree to annex their property into a CFD to re-pay the bonds via an assessment or special tax, secured by a priority lien, on their property tax bill. The intent of the program is that the assessment or parcel tax remains with the property even if it is sold or transferred, and the improvements must be permanently fixed to the property.
2) PACE Models. In California, there are several models available to local governments in administering a PACE program. Only the counties of Sonoma and Placer administer their own PACE programs. The majority of local governments contract with a private third-party or join a Joint Powers Authority (JPA), which contracts with a private third-party to carry out their PACE programs. The cost of third-party administration is not borne by the local agency, but is built into PACE loan financing. Some of these programs focus on residential projects, others target commercial projects, and some handle both residential and commercial portfolios.
3) Messages from the Federal Government. In 2010, the Federal Housing Finance Agency (FHFA), which oversees the nation's largest mortgage finance companies, Fannie Mae and Freddie Mac, raised concerns that residential PACE financing could pose a risk for federal mortgage enterprises (Fannie Mae and Freddie Mac), because PACE loans are a first-priority lien in the case of foreclosure, and outstanding PACE assessments would be paid before mortgage costs. In August of 2010, Fannie Mae and Freddie Mac announced they would not purchase mortgages for homes with first lien priority PACE obligations. The FHFA's action triggered many local governments to suspend their residential PACE programs.
The State of California and several other parties sued FHFA for not conducting a formal rulemaking before its decision; however, the 9th Circuit Court of Appeals ruled in FHFA's favor in March of 2013. (County of Sonoma, et al. v. Federal Housing Finance Agency, 710 F.3d 987 (2013)).
SB 96 (Budget and Fiscal Review Committee), Chapter 356, Statutes of 2013, sought to address FHFA's decision, and tasked the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) with administering a PACE loss reserve program of $10 million to keep mortgage interests whole during a foreclosure or a forced sale. The PACE Loss Reserve Program is designed to compensate first mortgage lenders for losses resulting from the existence of a PACE lien in a foreclosure or forced sale. The program covers PACE payments made during foreclosure, if a mortgage lender forecloses on a home that has a PACE lien, and any losses to a first mortgage lender up to the amount of outstanding PACE payment, if a county conducts a forced sale on a home for unpaid taxes.
The FHFA issued clarity to their position following the creation of the PACE Loss Reserve Program, in a letter to Governor Brown dated May 1, 2014, which reads: "I am writing to inform you that FHFA is not prepared to change its position on California's first-lien PACE program and will continue to prohibit the Enterprises from purchasing or refinancing mortgages that are encumbered with first-lien PACE loans... The Reserve Fund is not an adequate substitute for Enterprise mortgages maintaining a first lien position and FHFA also has concerns about the Reserve Fund's ongoing sustainability."
In July 2016, the Clean Energy Savings for All Americans initiative, included guidelines from the United States (U.S.) Department of Housing and Urban Development and the Department of Veterans Affairs as to how properties with residential PACE assessments can be purchased and refinanced with Federal Housing Administration (FHA) mortgage insurance and VA insured mortgages.
To date, FHFA has maintained its position against first-priority PACE liens.
4) Liens. PACE financing provides creditors security that they would be repaid because property tax liens are super priority liens that are senior to mortgage debt. If a house is sold in a foreclosure or tax sale, the PACE lien holder will be paid before other lienholders, like mortgage lenders. In response to FHFA's decision not to purchase mortgages with PACE liens, some third party PACE providers have started offering an option to homeowners who are unable to refinance or sell their homes called "Limited Subordination" or "Contractual Subordination." These contractual lien subordinations are an agreement between the PACE lien holder and a mortgage lender, where the PACE lien holder "subordinates" their right to foreclose on a home for non-payment of PACE assessments, and to the proceeds from foreclosure, until the mortgage lender has been paid in full for amounts due under its mortgage.
This practice is not utilized by all PACE providers in the industry, and not addressed in state statute. According to Renovate America, a third party PACE administrator, they have completed over 2,000 subordination contracts.
In November 2016, the Department of Energy released the "Best Practice Guidelines for Residential PACE Financing Programs". These guidelines state, "PACE Assessment Non-Acceleration upon Property Owner Default: In the event of a sale of a property with an outstanding PACE Assessment, including a foreclosure sale, the obligation remains with the property and the new homeowner will be responsible for paying the remaining PACE financing balance. A PACE assessment should survive the foreclosure process (i.e., the full PACE obligation amount does not become due and payable in the event of foreclosure of the property). After a foreclosure, the subsequent owners are responsible for future assessment payments, and could be responsible for any delinquent amounts that remain if foreclosure proceeds were insufficient to pay-off the delinquent amount."
A PACE assessment does not accelerate upon default, meaning only the amount that is owned is due (not the entire amount of the PACE assessment). Default of PACE assessment triggers a local agency's right (as the PACE lien holder) to request that the defaulted PACE assessment be stripped from the tax roll. This right to strip an assessment from the tax roll and pursue the judicial foreclosure process to recover the defaulted PACE assessment remains with the PACE lien holder.
As a result of contractual subordination agreements, some PACE lien holders defer their right to strip a defaulted PACE assessment from the tax roll to the holder of the first mortgage. In other PACE models that do not use or offer any contractual lien subordination, the PACE lien holder identifies if any properties with a PACE assessment are delinquent and maintains the sole discretion to pursue or defer foreclosure proceedings.
5) Bill Summary. This bill applies to PACE assessments and delinquent installments based on PACE assessments that arise from a contract entered into on or after January 1, 2018.
a) Delinquent Installment. This bill authorizes a county tax collector to direct the county auditor to remove a delinquent installment based on a PACE assessment from the tax roll. Under existing law, only the governing body of the local agency (PACE lien holder) may direct the removal of an unpaid installment based on a PACE assessment from the tax roll.
b) Limited Subordination Agreements. This bill prohibits a property with a PACE assessment from being subject to an agreement where the authority to collect a defaulted lien based on a PACE assessment is transferred to, subject to, or contingent upon third party approval, unless the priority lien has been removed from the county's tax rolls and the right to collect the PACE assessment and any defaulted lien amount is returned to the PACE lien holder.
c) County Reserve Fund. Under existing law, unpaid property taxes that become delinquent and defaulted are subject to specified penalties, including unpaid PACE assessments. This bill requires any penalties applicable to the delinquent PACE assessment to be deposited into the restricted fund. This bill requires counties to create a restricted fund and to appropriate moneys from the fund to offset any losses in property tax revenue to local governments as a result of properties with PACE assessments being sold at tax defaulted property sales for less than the minimum prices established by existing law.
6) Author's Statement. According to the author, "The PACE program has proven an effective way to finance energy efficiency and renewable energy upgrades for consumers. Yet as PACE continues to grow, so do opportunities for unscrupulous behavior and the potential for consumers to be taken advantage of by a program otherwise designed to help them. We must ensure that consumer protections are in place, and this bill does that. AB 271 protects counties, schools, and taxpayers, and also protects PACE so it can remain a viable alternative for energy efficiency and renewable energy generation."
7) Property Tax. Existing law establishes January 1st of each year as the "lien date," or the date upon which the assessor values property, and property taxes are imposed on its owner in the form of a lien against the property. For property on the secured roll, which generally includes real property such as land and buildings, tax collectors must send bills to taxpayers by November 1st. Taxpayers must pay their bills in two installments: the first on November 1st, which becomes delinquent December 10th, and the second on February 1st, with delinquency occurring on April 10th. Taxpayers can pay in full at the first installment. Many other locally-imposed charges, fees, taxes, and assessments, such as Mello-Roos taxes, benefit assessments, and parcel taxes, are also collected as part of the property tax bill, and subject to the same restrictions and penalties.
When taxes become delinquent, state law imposes a 10% penalty on each amount, and counties can also apply administrative charges. The property becomes tax defaulted if taxes remain unpaid as of June 30th, triggering redemption penalties of 1.5% a month (18% per year) until the full amount is paid. After five years, the tax collector with approval by the board of supervisors can sell a tax defaulted residential property to satisfy back taxes, penalties, costs, and other liens; for commercial property, the tax collector can do so after three years. After the sale, proceeds first pay for the costs of newspaper publishing, and recording fees. Funds are then distributed to taxing agencies with valid claims, and to the tax collector to pay for notices and contacting taxpayers. After that, proceeds satisfy liens held by parties in interest. Any amounts left over, known as "excess proceeds," are then divided up between each taxing entity according to their appropriate share of the property tax, after the county deducts specified costs.
8) Pending Issues. Last session, AB 2693 (Dababneh), Chapter 618, Statutes of 2016, established a number of consumer notice requirements and sought to tighten financing standards for PACE assessments for residential properties. This Committee, jointly with the Banking and Finance Committee, held an oversight hearing, to provide oversight on the current administration of PACE programs and to gain a better understanding on concerns expressed over residential PACE and the impacts on the financial market. Following a series of news articles in the Wall Street Journal, the filing of two class action lawsuits, and the introduction of legislation at the Federal level, the topic of residential PACE and expression of concerns over the lack of oversight and protections for consumers continue. PACE administrators and supporters of PACE programs continue to point to energy savings and the fact that the industry is still relatively new and experiencing growing pains.
SB 242 (Skinner) of the current legislative session, pending in the Senate Governance and Finance Committee, contains several provisions which seek to address a number of these issues that have been raised about PACE programs administered by third party providers.
9) Policy Consideration. The Legislature may wish to encourage the author to continue to work with stakeholders to ensure adequate notification that a defaulted PACE assessment has been removed from the tax roll.
10) Arguments in Support. The California Association of County Treasurers and Tax Collectors argue, "The proposed changes will protect tax payers and those who rely on local government services by removing defaulted PACE liens from the property tax bill. The proposed changes will reduce the chances counties, schools, other local government entities and the State will lose revenue as a result of properties with PACE assessments being sold at tax defaulted land sale at prices below the original minimum bid amount. It will also ensure that the property tax bill is not being used to inappropriately enrich private parties at the expense of consumers who may not realize that tax code related penalties and interest will apply to their delinquent PACE assessments."
11) Arguments in Opposition. Renovate America states, "Removing delinquent installments from the secured tax rolls changes PACE from a secured financing instrument, increases consumer costs, and reduces the availability of PACE financing. Removing delinquent installments from the secured tax rolls will increase foreclosures of property owners. The legislation would prohibit contractual subordination, limiting homeowner options at time of sale or refinance."
Analysis Prepared by: Misa Lennox / L. GOV. / (916) 319-3958 FN: 0000486
2017 CA A 1520: Bill Analysis - 05/15/2017 - Assembly Appropriations Committee, Hearing Date 05/17/2017
Date of Hearing: May 17, 2017
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez Fletcher, Chair
AB 1520
(Burke) - As Amended April 17, 2017
Policy Human Services Vote: 6 - 0
Committee:
Urgency: No State Mandated No Reimbursable: No
Local Program:
SUMMARY: This bill establishes the Lifting Children and Families Out of Poverty Act of 2017. Specifically, this bill:
1) Establishes the Lifting Children and Families Out of Poverty Task Force (Task Force), to be made up of specified stakeholders, for purposes of researching, analyzing, and providing guidance to the Legislature in making appropriations pursuant to this bill and in supporting the state's efforts on lifetime wellness, self-sufficiency, and economic strength in families and communities throughout California.
2) Requires the Legislative Analyst's Office (LAO) and the Task Force, in conjunction with the release of the Governor's budget proposal each year, as specified, to report to the Legislature on their projections of how the Governor's budget proposal will impact the state's child poverty rate.
3) Requires the LAO and the Task Force, beginning in 2019 and every two years thereafter, to prepare an analysis to be reported to the Legislature that includes specified information regarding impacts of various actions on child poverty
4) Encourages the Legislature, beginning in 2019, and every two years thereafter, to hold a joint hearing to assess the impact that the framework proposed by this bill has had on the state child poverty rate and encourages the committees convening each hearing to consider the reports submitted by the LAO and the Task Force.
5) Encourages the Legislature, on an annual basis, to appropriate funds for programs, services, or expenditures for the purpose of cutting child poverty in half by 2038-39 in amounts deemed appropriate, as specified.
FISCAL EFFECT:
1) Unknown costs, likely in the low hundreds of thousands of dollars annually, to an unspecified state agency to establish and administer the Task Force.
2) Ongoing costs, likely minor, to various state departments to participate on the task force.
3) Ongoing future cost pressure, likely in the low billions of dollars (GF), to fund programs, services, and expenditures identified by the LAO and the Task Force. This would be offset to the extent these investments resulted in reduced demand for foster care, juvenile detention, and social services, and reduced health care costs.
COMMENTS:
1) Purpose. This bill seeks to reduce child poverty by establishing a framework through the state budget process that requires the Legislature to fund programs and services that further this goal. According to the author:
"1 in 5 children live in poverty, which translates into 1/3 of African American children and 1/3 of Latino children live in poverty; even though, California is the sixth largest economy in the world. From a moral perspective, it is shameful to have one of the largest economies in the world and the largest percentage of child poverty in the country. On the other hand and from an economic standpoint, poverty itself threatens the future economic stability of California. Poverty is not an isolated event; poverty is the effect of many causes that loop back and perpetuates despair among our communities."
2) Background. According to the U.S. Census Bureau's Official Poverty Measure, more than one in five children - 21.2% - in California were living in poverty in 2015. According to the Public Policy Institute of California's (PPIC's) California Poverty Measure (CPM), which employs a more comprehensive methodology for measuring poverty across regions, the child poverty rate in 2014 was 23.1%. Using the combined 2012 through 2014 CPM, PPIC determined that child poverty rates across counties vary significantly, from a high of 30.8% in Santa Barbara County to a low of 13% in El Dorado County. Los Angeles County has a child poverty rate of 29.1%, while Sacramento County's was 19.1%.
State child poverty rates per the 2014 CPM also vary by race and ethnicity, with Latino children having a poverty rate of 31.6%, African American children a rate of 19%, Asian American children 13.5%, and white children 11.9%. Children under the age of 5 had a poverty rate of 23.6%, compared to children ages 5 and older, whose poverty rate was 22.8%. 81.8% of poor children in California lived in families with at least one working adult.
Moreover, PPIC finds that, without safety net resources such as CalFresh or CalWORKs, 37.1% of the state's children would live in poverty - that is, social safety net programs reduced the child poverty rate by 14%.
3) Implementation. This bill, as written, does not designate what state agency or department should establish, house, and administer the Task Force. Should this bill move forward, clarifying details should be added.
Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081
House bill, H.R. 1921, and its companion Senate bill, S. 185, amend the Head Start Act to replace the existing Head Start program with block grants to states and Indian tribes for pre-kindergarten (pre-K) education.
Instead of providing direct financial assistance to Head Start agencies, the Department of Health and Human Services (HHS) shall allot block grant funds for pre-K education among eligible states and Indian tribes in accordance with their relative proportions of children, age five and younger, from low-income households. Grant recipients shall use the grant funds to: (1) award subgrants to eligible entities that provide pre-K education programs; (2) administer such programs; and (3) provide technical assistance, oversight, monitoring, research, and training.
Under current law, HHS is authorized to designate, monitor, and establish standards for Head Start agencies. The bill instead shifts pre-K program oversight and control to states and Indian tribes, which shall have full flexibility to use grant funds to finance the pre-K programs of their choice. In addition, grant recipients may use grant funds to establish portable voucher systems that allow costs to be paid for attendance at private pre-K education programs.
Under current law, federal financial assistance for a Head Start program is generally limited to 80% of total program costs. The bill maintains this limitation by requiring grant recipients to provide matching funds equal to 20% of the grant amount
The County would not have an official position on these bills.