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

(1)  The projected budget deficit for the 2003-04 fiscal year represents the largest fiscal imbalance in California history. This imbalance necessitates drastic actions not ordinarily contemplated in usual budget years.

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(2)  In order to address the budgetary imbalance it is necessary to find and cancel General Fund commitments where possible so as to reduce General Fund obligations.

(3)  The creation of affordable housing is extraordinarily difficult, necessitating, among other things, the acquisition of suitable sites, the design and engineering of the facility and securing multiple sources of private and public financing. In addition, affordable housing development also frequently encounters difficulties in obtaining local governmental approvals. Because of these difficulties there are typically long lead-times between the commitment of funds through the state‘s housing programs and the actual final approval of the project, completion of construction, and disbursement of state funds. Because of the gap in time between the award of state funds and final fund disbursement, there is an opportunity to disencumber fund commitments to ease the state’s present fiscal emergency.

(4)  While these housing projects present an opportunity to recoup General Fund moneys, the Legislature recognizes that the withdrawal of state funds may mean the cancellation of projects, the loss of affordable housing, and the creation of potential liabilities to the state where costs have been incurred in reliance on the state funding commitment. The need to find revenue sources does not supersede the need for public assistance to facilitate the creation of new housing opportunities particularly for persons and households of low to moderate income.

(5)  By definition, housing projects that have already received a commitment of state funds are further advanced towards completion than projects that have yet to start the process of seeking or receiving state housing funds. The enactment of this part, therefore, provides an opportunity to meet the multiple goals of relieving existing financial obligations of the General Fund, continuing the state support of worthy projects, and avoiding the potential liabilities where costs have been incurred in reliance on the state’s commitment of funds. The Legislature finds and declares that it is appropriate, where possible, to disencumber General Fund obligations in those areas where the state’s need to recoup General Fund revenues can be balanced by the substitution of other funds through legal mechanism.

(6)  The Legislature’s ability to modify a general obligation bond program approved by the voters is restricted by the California Constitution and interpretative case law to those situations where the modification is consistent with the underlying purpose of the program and not inconsistent with the express language of the measure placed before the voters. For the purposes of this part and the programs administered by the department thereunder, the Legislature finds and declares that the project selection criteria for many of the existing programs have been modified by the bond measure contained in this part, as approved by the voters. However, the project selection criteria for the Joe Serna, Jr. Farmworker Housing Grant Program (Chapter 3.2 (commencing with Section 50517.5) of Part 2) and the CalHome Program (Chapter 6 (commencing with Section 50650) of Part 2) have been unmodified by this part. Therefore, projects funded through these programs that have previously been determined eligible and have met the selection criteria would similarly be eligible and meet the selection criteria for these programs as funded under this part.

(7)  If the funding for projects previously funded under the Joe Serna, Jr. Farmworker Housing Grant Program and the CalHome Program were disencumbered, these projects would be eligible to compete for funds under the same programs as funded through this part. However, the time delays and costs associated by the resubmittal of applications would render a hardship to the project sponsors and cause unnecessary delays in project implementation.

(8)  The use of funds approved by the voters through the enactment of this part to ensure successful completion of projects eligible and fundable through the Joe Serna, Jr. Farmworker Housing Grant Program and the CalHome Program that would otherwise be delayed or lost if the general funding was disencumbered is both necessary and appropriate, and will facilitate the efficient and effective implementation of the projects funded through this part and will further the goals of the respective programs.

(b)  In order to return moneys appropriated in the Budget Acts of 2000 and 2001 to the General Fund to assist in easing the current fiscal emergency, and to ensure the expeditious completion of projects that have successfully applied for, and were selected for, funding during the 2000-01 and 2001-02 fiscal years through the Joe Serna, Jr. Farmworker Housing Grant Program and CalHome Program, the department shall do both of the following:

(1)  Disencumber funding commitments for all projects funded through appropriations in the Budget Acts of 2000 and 2001 for which funds have not been disbursed as of the effective date of this section.

(2)  Provide replacement funding to these projects, subject to the terms and conditions of the prior commitment, through paragraph (4) and paragraph (5), respectively, of subdivision (a) of Section 53533. No additional application shall be required to the affected project sponsors.

(c)  Because it is the Legislature’s intent to avoid the disruption of existing projects, only those portions of a project’s budget that is eligible for replacement as the construction or acquisition of a capital asset pursuant to the General Obligation Bond Law (Chapter 4 (commencing with Section 16720) of Part 3 of Division 4 of Title 2 of the Government Code) shall be disencumbered.

(Added by Stats. 2003, Ch. 228, Sec. 25. Effective August 11, 2003.)