Amended  IN  Senate  June 13, 2023
Amended  IN  Assembly  April 17, 2023
Amended  IN  Assembly  April 10, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 1587

Introduced by Assembly Member Ting
(Principal coauthor: Senator Min)

February 17, 2023

An act to amend Section 50675.1.1 of the Health and Safety add Division 26 (commencing with Section 110000) to the Financial Code, relating to housing. financial transactions.


LEGISLATIVE COUNSEL'S DIGEST


AB 1587, as amended, Ting. Multifamily Housing Program: report on use of funds. Financial transactions: firearms merchants: merchant category code.
Existing law, the California Financing Law, generally provides for the licensure and regulation of finance lenders, brokers, and program administrators by the Commissioner of Financial Protection and Innovation.
Existing law establishes a firearm industry standard of conduct that requires a firearm industry member to establish, implement, and enforce reasonable controls and to take responsible precautions to ensure that the member does not sell, distribute, or provide a firearm-related product to a downstream distributor or retailer of firearm-related products under specified circumstances. Existing law prohibits a firearm industry member from manufacturing, marketing, importing, offering for wholesale sale, or offering for retail sale a firearm-related product that is abnormally dangerous and likely to create an unreasonable risk of harm to public health and safety in California, as specified. Existing law authorizes, among others, the Attorney General to bring a civil action against a firearm industry member for an act or omission in violation of the firearm industry standard of conduct, as specified. Existing law defines various terms for these purposes.
This bill would require specified entities that facilitate or process a payment card transaction to assign to a firearms merchant, or require a firearms merchant to use, the merchant category code for firearms and ammunition businesses established by the International Organization for Standardization on September 9, 2022. The bill would prohibit specified entities involved in facilitating or processing a payment card transaction from assigning to a firearms merchant, or from requiring a firearms merchant to use, a merchant category code that classifies the firearms merchant as a general merchandise retailer or sporting goods retailer. The bill would provide that the Attorney General has exclusive authority to enforce these provisions, and would authorize the Attorney General to bring a civil action to enforce these provisions and remedy harm caused by a violation of these provisions. The bill would require a court that determines that a person or entity has violated these provisions to award specified relief, including a civil penalty in the amount of $10,000 for each violation. The bill would define various terms for these purposes.

Existing law establishes the Multifamily Housing Program, administered by the Department of Housing and Community Development. Existing law requires that funds appropriated to provide housing for individuals and families who are experiencing homelessness or who are at risk of homelessness and who are impacted by the COVID-19 pandemic be disbursed in accordance with the Multifamily Housing Program for specified uses, including as grants to cities, counties, and cities and counties. Existing law requires the department, in coordination with the Business, Consumer Services, and Housing Agency, to report to specified committees of the Legislature on the use of these funds, as provided, on or before April 1, 2021. Existing law requires the report to include specified information, including the location of any properties for which the funds are used and the number of usable housing units produced, or planned to be produced, using the funds.

This bill would revise the reporting requirement described above by requiring the department to report on the use of those funds on or before July 1, 2026. The bill would additionally require that report to include the average cost and length of time to rehabilitate or convert units to long-term housing units, what services are provided to individuals, how the services are funded, and the length of time to spend the funds.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Division 26 (commencing with Section 110000) is added to the Financial Code, to read:

DIVISION 26. Firearms Merchant Category Code

110000.
 For purposes of this division, the following definitions apply:
(a) “Ammunition” has the same meaning as provided in subdivision (b) of Section 16150 of the Penal Code.
(b) “Financial institution” means any institution the business of which is engaging in financial activities as described in Section 1843(k) of Title 12 of the United States Code.
(c) “Firearm” has the same meaning as provided in subdivisions (a) and (b) of Section 16520 of the Penal Code.
(d) “Firearms merchant” means a retailer doing business in California for which the highest sales value is, or is expected to result from, the sale of firearms, firearms accessories, or ammunition in aggregate.
(e) “Payment card” means a credit card, debit card, check card, or other card that is issued for the purpose of purchasing or obtaining goods, services, money, or any other thing of value.
(f) “Payment card issuer” means either of the following:
(1) A lender, including, but not limited to, a financial institution, that receives applications and issues payment cards to individuals.
(2) A merchant that receives applications and issues payment cards to individuals.
(g) “Payment card network” means an entity that, directly or through a licensed member, processor, or agent, provides services that do either of the following:
(1) Route information and data to conduct debit card or credit card transaction authorization, clearance, and settlement.
(2) Allow an entity to accept as a form of payment a debit card or a credit card.
(h) “Payment card transaction” means a transaction in which a person uses a payment card or other payment code or device issued or approved through a payment card network to debit a deposit account or use a line of credit.

110001.
 (a) An entity, including, but not limited to, a financial institution, an acquirer, a payment card network, and a payment card issuer, that facilitates or processes a payment card transaction shall assign to a firearms merchant, or require a firearms merchant to use, the merchant category code for firearms and ammunition businesses established by the International Organization for Standardization on September 9, 2022.
(b) An entity involved in facilitating or processing a payment card transaction, including, but not limited to, a financial institution, an acquirer, a payment card network, or a payment card issuer, shall not assign to a firearms merchant, and shall not require a firearms merchant to use, a merchant category code that classifies the firearms merchant as a general merchandise retailer or sporting goods retailer.
(c) A waiver of a provision of this division is contrary to public policy and is void and unenforceable.

110002.
 (a) The Attorney General has exclusive authority to enforce this division.
(b) Not later than the 30th day before bringing an action under subdivision (e), the Attorney General shall give written notice to the person or entity identifying the specific provisions of this chapter that are or were being violated.
(c) The Attorney General shall not bring an action under subdivision (e) if the person or entity who receives the notice described in subdivision (b) does both of the following:
(1) Cures the identified violation within 30 days of receiving the notice.
(2) Provides the Attorney General a written statement confirming that the person or entity has done all of the following:
(A) Cured the violation.
(B) Provided supporting documentation to show how the violation was cured.
(C) Made changes to internal policies to prevent the recurrence of violations in the future.
(d) A person or entity who violates the division and fails to cure the violation in accordance with subdivision (c) shall be liable as provided in subdivision (e).
(e) (1) The Attorney General may bring a civil action to enforce this division and remedy harm caused by a violation of this division.
(2) If a court determines that a person or entity has violated this division, the court shall award all of the following relief:
(A) A civil penalty in the amount of ten thousand dollars ($10,000) for each violation.
(B) Injunctive relief sufficient to prevent the person or entity from further violations of this division.
(C) Reasonable attorneys’ fees and costs incurred in investigating and bringing an action under this division.

SECTION 1.Section 50675.1.1 of the Health and Safety Code is amended to read:
50675.1.1.

(a)Notwithstanding any other law, including subdivision (b) of Section 50675.1, funds appropriated in the 2020 Budget Act or an act related to the 2020 Budget Act, including, but not limited to, moneys received from the Coronavirus Relief Fund established by the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act (Public Law 116-136), to provide housing for individuals and families who are experiencing homelessness or who are at risk of homelessness, as defined in Section 578.3 of Title 24 of the Code of Federal Regulations, and who are impacted by the COVID-19 pandemic, shall be disbursed in accordance with the Multifamily Housing Program, including as grants to cities, counties, and other local public entities, as necessary, created by this chapter for the following uses, consistent with applicable federal law and guidance:

(1)Acquisition or rehabilitation of motels, hotels, or hostels.

(2)Master leasing of properties.

(3)Acquisition of other sites and assets, including purchase of apartments or homes, adult residential facilities, residential care facilities for the elderly, manufactured housing, and other buildings with existing residential uses that could be converted to permanent or interim housing.

(4)Conversion of units from nonresidential to residential in a structure with a certificate of occupancy as a motel, hotel, or hostel.

(5)The purchase of affordability covenants and restrictions for units.

(6)Relocation costs for individuals who are being displaced as a result of rehabilitation of existing units.

(7)Capitalized operating subsidies for units purchased, converted, or altered with funds provided by this section.

(b)Where possible, the funds described in subdivision (a) shall be allocated by the department in a manner that takes into consideration all of the following:

(1)Geographic needs across the state.

(2)Areas with high unsheltered populations and high COVID-19 infection rates.

(3)The demonstrated ability of the applicant to fund ongoing operating reserves.

(4)The creation of new permanent housing options.

(5)The potential for state funding for capitalized operating reserves to make additional housing units financially viable through this program.

(c)Any conflict between the other requirements of the Multifamily Housing Program created by this chapter and this section shall be resolved in favor of this section, as may be set forth in the guidelines authorized by this section.

(d)The Department of Housing and Community Development may adopt guidelines for the expenditure of the funds appropriated to the department. The guidelines shall not be subject to the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

(e)Up to 2 percent of the funds appropriated for this section may be expended for the costs to administer this program.

(f)On or before July 1, 2026, the Department of Housing and Community Development, in coordination with the Business, Consumer Services, and Housing Agency, shall report to the chairs of each fiscal committee and each relevant policy committee of the Legislature on the use of the funds described in this section. The report shall include, but not be limited to, all of the following:

(1)The amount of funds expended for the uses described in this section.

(2)The location of any properties for which the funds are used.

(3)The number of usable housing units produced, or planned to be produced, using the funds.

(4)The number of individuals housed, or likely to be housed, using the funds.

(5)The number of units, and the location of those units, for which operating subsidies have been, or are planned to be, capitalized using the funds.

(6)An explanation of how funding decisions were made for acquisition, conversion, or rehabilitation projects, or for capitalized operating subsidies, including what metrics were considered in making those decisions.

(7)Any lessons learned from the use of the funds.

(8)The average cost and length of time to rehabilitate or convert these units to long-term housing units.

(9)What services are provided to individuals, how the services are funded, and the length of time to spend the funds.

(g)Any project that uses funds received from the Coronavirus Relief Fund for any of the purposes specified in subdivision (a) shall be deemed consistent and in conformity with any applicable local plan, standard, or requirement, and allowed as a permitted use, within the zone in which the structure is located, and shall not be subject to a conditional use permit, discretionary permit, or to any other discretionary reviews or approvals.

(h)A report to be submitted pursuant to subdivision (f) shall be submitted in compliance with Section 9795 of the Government Code.