HomeMy WebLinkAboutAgenda Report - May 6, 2015 C-15AGENDA ITEM Co4t5
&% CITY OF LODI
COUNCIL COMMUNICATION
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AGENDA TITLE: Authorize the Mayor, on Behalf of the City Council, to Send Letters of
Support for AB 1335 – Building Homes and Jobs Act (Atkins) – and
AB 35 – Low -Income Housing Tax Credits (Chiu and Atkins)
MEETING DATE: May 6, 2015
PREPARED BY: City Clerk
RECOMMENDED ACTION: Authorize the mayor, on behalf of the City Council, to send letters of
support for AB 1335 – Building Homes and Jobs Act (Atkins) – and
AB 35 – Low -Income Housing Tax Credits (Chiu and Atkins).
BACKGROUND INFORMATION: On April 9, 2015, the City received correspondence from the League
of California Cities to support AB 1335 (Atkins) and AB 35 (Chiu and
Atkins), legislation pertaining to housing.
AB 1335 would generate up to $700 million per year for affordable rental or ownership housing,
supportive housing, emergency shelters, transitional housing, and other housing needs via a $75
recordation fee on real estate transactions, with the exception of home sales. This bill would provide an
ongoing, permanent state source of funding which would allow the state to fund existing programs at
dependable levels. This is a more reliable and efficient mechanism than occasional housing bonds.
Further, the Building Homes and Jobs Act will help to leverage additional federal, local, and private
investment.
AB 35 would increase the state's Low Income Housing Tax Credit by $300 million to build and rehabilitate
affordable housing. Increasing the available tax credits for low-income housing will leverage additional
federal tax credits and tax exempt bond authority. Building more affordable housing will not only help to
mitigate our low income housing crisis, but will increase construction jobs and tax revenues.
For the reasons stated above and in the attached draft correspondence, it is recommended that the City
Council authorize the execution and delivery of the proposed correspondence.
FISCAL IMPACT: Not applicable.
FUNDING AVAILABLE: Not applicable.
Je&ifer M. Mrraiolo
City Clerk
APPROVED: -V—
Stephen Schwab uer, City Manager
N: Wdmin istration\CLERK\Council\COUNCOM\LeagueSupportOpposeMaster2.doc
Jennifer Ferraiolo
From: Stephen R. Qualls <squalls@cacities.org>
Sent: Thursday, April 09, 2015 12:14 PM
Subject: CVD SB 608 Oppose Letter and AB 35 & 1335 Support Letters
Attachments: CVD SB 608 (Liu) letter B 4.9.15.docx.doc; CVD SB 608 (Liu) letter 4.9.15.docx.doc
The Central Valley Division will be sending a letter opposing SB 608 The Right to Rest Act.
We are also sending letters in support of AB 35 & 1335 which provide funding for affordable housing.
I previously sent out backup materials for all of the attached bills. If you would like me to resend them, please contact
me.
If your city would prefer to have it's name removed from the letter head please let me know by COB Monday April 13th.
Division President JoAnne Mounce will sign the letters unless a majority of the member cities oppose sending all or any
of the letters.
If you have any questions, please contact me.
Thank you,
Stephen Qualls
Central Valley Regional Public Affairs Manager League of California Cities
209-614-0118
Fax 209-883-0653
squalls@cavities.org<mailto:squalls@cacities.org>
[Description: Description: LCC_Logo_SM] [X]
Strengthening California Cities through Advocacy and Education To expand and protect local control for cities through
education and advocacy in order to enhance the quality of life for all Californians.
<http://www.cacities.org/AC>
PLEASE DO NOT distribute political campaign advocacy information from public (city hall) computers, on city time, or
using public resources, even if it's from your personal email account. If in doubt, check with your city attorney.
***Disclaimer***Please Note: Please take the following precautions if this email is about a CITIPAC event. Though it is
not illegal for you to receive this notice via a city e-mail address, you should not respond to it or forward it using public
resources. You may however forward this message to your non-public e-mail account for distribution on non-public
time. If you have questions about the event or need additional information, please contact Mike Egan at (916) 658-8271
or egan@cacities.org
AMENDED IN ASSEMBLY APRIL 20, 2015
CALIFORNIA LEGISLATURE -2015-16 REGULAR SESSION
ASSEMBLY BILL No. 1335
Introduced by Assembly Member Atkins
(Principal coauthors: Assembly Members Chau, Chiu, and Gordon)
(Coauthors: Assembly Members Alejo, Bloom, Bonilla, Bonta,
Cooper, Gonzalez, Lopez, Low, McCarty, Mullin, Rendon,
Santiago, Mark Stone, Ting, and Weber)
February 27, 2015
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, and declaring the
urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 1335, as amended, Atkins. Building Homes and Jobs Act.
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 Building Homes and Jobs Act. The bill
would make legislative findings and declarations relating to the need
for establishing permanent, ongoing sources of funding dedicated to
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affordable housing development. The bill would impose a fee, except
as provided, of $75 to be paid at the time of the recording of every real
estate instrument, paper, or notice required or permitted by law to be
recorded, per each single transaction per single parcel of real property,
not to exceed $225. 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, after deduction of any actual and necessary administrative
costs incurred by the county recorder, be sent quarterly to the
Department of Housing and Community Development for deposit in
the Building Homes and Jobs Fund, which the bill would create within
the State Treasury. The bill wouldrovide that., upon appropriation by
the Legislature, require that 20% of the moneys in the fund be expended
for affordable homeowership activities and authorize the remainder of
the moneys in the funder to be expended for supporting affordable
housing, home ownership opportunities, and other housing -related
program, as specified. The bill would impose certain auditing and
reporting requirements.
This bill would state the intent of the Legislature to enact legislation
that would create the Secretary of Housing within state government to
oversee all activities related to housing in the state.
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.
This bill would declare that it is to take effect immediately as an
urgency statute.
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 SECTION 1. This act shall be known as the Building Homes
2 and Jobs Act.
3 SEC. 2. (a) The Legislature finds and declares that having a
4 healthy housing market that provides an adequate supply of homes
5 affordable to Californians at all income levels is critical to the
6 economic prosperity and quality of life in the state.
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1 (b) The Legislature further finds and declares all of the
2 following:
3 (1) Funding approved by the state's voters in 2002 and 2006,
4 as of June 2014, has financed the construction, rehabilitation, and
5 preservation of over 14,000 shelter spaces and 149,000 affordable
6 homes. These numbers include thousands of supportive homes for
7 people experiencing homelessness. In addition, these funds have
8 helped tens of thousands of families become or remain
9 homeowners. Nearly all of the voter -approved funding for
10 affordable housing was awarded by the beginning of 2015.
11 (2) The requirement in the Community Redevelopment Law
12 that redevelopment agencies set aside 20 percent of tax increment
13 for affordable housing generated roughly $1 billion per year. With
14 the elimination of redevelopment agencies, this funding stream
15 has disappeared.
16 (3) In 2014, the Legislature committed 10 percent of ongoing
17 cap -and -trade funds for affordable housing that reduces greenhouse
18 gas emissions and dedicated $100 million in one-time funding for
19 affordable multifamily and permanent supportive housing. In
20 addition, the people of California thoughtfully approved the
21 repurposing of $600 million in already committed bond funds for
22 the creation of affordable rental and permanent supportive housing
23 for veterans through the passage of Proposition 41.
24 (4) Despite these investments, the need in the state of California
25 greatly exceeds the available resources, considering 36.2 percent
26 of mortgaged homeowners and 47.7 percent of all renters are
27 spending more than 35 percent of their household incomes on
28 housing.
29 (5) California has 12 percent of the United States population,
30 but 20 percent of its homeless population. California has the highest
31 percentage of unsheltered homeless in the nation, with 63 percent
32 of homeless Californians not having shelter. California has 24
33 percent of the nation's homeless veterans population and one-third
34 of the nations' chronically homeless population. California also
35 has the largest populations of unaccompanied homeless children
36 and youth, with 30 percent of the national total.
37 (6) Furthermore, four of the top 10 metropolitan areas in the
38 country f --' otnel.s with the highest rate of homelessness are in
39 the following metropolitan areas in California: San
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Jose-Sunnyvale-Santa Clara, Los Angeles -Long Beach -Santa Ana,
Fresno, and Stockton.
(7) California continues to have the second lowest
homeownership rate in the nation, and the Los Angeles
metropolitan area is now a majority renter area. In fact, five of the
eight lowest homeownership rates are in metropolitan areas in
California.
(8) Los Angeles and Orange Counties have been identified as
the epicenter of overcrowded housing, and numerous studies have
shown that children in crowded homes have poorer health, worse
scores on mathematics and reading tests, and higher rates of
depression and behavioral problems—even when poverty is taken
into account.
(9) 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.
(10) Eight of the top 10 hardest hit cities by the foreclosure
crisis in the nation were in California. They include the Cities of
Stockton, Modesto, Vallejo, Riverside, San Bernardino, Merced,
Bakersfield, and Sacramento.
(11) 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.
(12) Many economists agree that the state's higher than average
unemployment rate 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 an 83 -percent reduction in residential
permits. Restoration of a healthy construction sector will
significantly reduce the state's unemployment rate.
(13) The lack of sufficient housing impedes economic growth
and development by making it difficult for California employers
to attract and retain employees.
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(14) 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.
(15) 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.
(16) In order to promote housing and homeownership
opportunities, the recording fee imposed by this act shall not be
applied to any recording made in connection with a sale of real
property. Purchasing a home is likely the largest purchase made
by Californians, and it is the intent of this act to not increase
transaction costs associated with these transfers.
SEC. 3. Section 27388.1 is added to the Government Code, to
read:
27388.1. (a) (1) Commencing January 1, 2016, and 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, per each single transaction per parcel of real
property. The fee imposed by this section shall not exceed two
hundred twenty-five dollars ($225). "Real estate instrument, paper,
or notice" means a document relating to real property,
but not limited to, including the following: deed, grant deed,
trustee's deed, deed of trust, reconveyance, quit claim deed,
fictitious deed of trust, assignment of deed of trust, request for
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.
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(2) The fee described in paragraph (1) shall not be imposed 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
or on any real estate instrument, paper, or notice recorded in
connection with a transfer of real property that is a residential
dwelling to an owner -occupier.
the f�e, together with any eharges or reeording fees that am
effeet on or before the effeetive dafe of the aet adding this seetiorr,
twenty five dollars
(b) The fees, after deduction of any actual and necessary
administrative costs incurred by the county recorder in carrying
out this section, shall be remitted quarterly, on or before the last
day of the month next succeeding each calendar quarterly period,
to the Department of Housing and Community Development for
deposit in the California Homes and Jobs Trust Fund established
by Section 50470 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 before the last day of the month next succeeding
each quarterly period.
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. BUILDING HOMES AND JOBS ACT
Article 1. General Provisions
50470. (a) (1) There is hereby created in the State Treasury
the Building Homes and Jobs Trust Fund. All interest or other
increments resulting from the investment of moneys in the fund
shall be deposited in the fund, notwithstanding Section 16305.7
of the Government Code.
(2) Moneys in the Building Homes and Jobs Trust Fund shall
not be subject to transfer to any other fund pursuant to any
provision of Part 2 (commencing with Section 16300) of Division
4 of Title 2 of the Government Code, except to the Surplus Money
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Investment Fund. Upon appropriation by the , tnotteys
Legislature:
(A) Twenty percent of moneys in the fund shall be expended for
affordable homeownership activities.
(B) The remainder of the moneys in the fund may be expended
for the following purposes:
(i) The development, acquisition, rehabilitation, and preservation
of rental housing that is affordable to extremely low, very low,
low- low-, and moderate -income households, including necessary
operating subsidies.
(ii) Affordable rental and ownership housing that meets the
needs of a growing workforce up to 120 percent of area median
income.
(iii) Matching portions of funds placed into local or regional
housing trust funds.
(iv) Matching portions of funds available through the Low and
Moderate Income Housing Asset Fund pursuant to subdivision (d)
of Section 34176 of the Health and Safety Code.
fE�
(v) Capitalized reserves for services connected to the creation
of new permanent supportive housing, including, but not limited
to, developments funded through the Veterans Housing and
Homelessness Prevention Program.
tom?
(vi) Emergency shelters, transitional housing, and rapid
rehousing.
(vii) Accessibility modifications.
(viii) Efforts to acquire and rehabilitate foreclosed or vacant
homes.
(4)
(xi) Homeownership opportunities, including, but not limited
to, down payment assistance.
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(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.
50470.5. For purposes of this chapter, "department" means
the Department of Housing and Community Development.
50471. (a) In order to maximize efficiency and address
comprehensive needs, the department, in consultation with the
California Housing Finance Agency, the California Tax Credit
Allocation Committee, and the California Debt Limit Allocation
Committee, shall develop and submit to the Legislature, at the time
of the Department of Finance's adjustments to the proposed
2015-16 fiscal year budget pursuant to subdivision (e) of Section
13308 of the Government Code, the Building Homes and Jobs
Investment Strategy. Notwithstanding Section 10231.5 of the
Government Code, commencing with the 2020-21 fiscal year, and
every five years thereafter, concurrent with the release of the
Governor's proposed budget, the department shall update the
investment strategy and submit it to the Legislature. The investment
strategy shall do all of the following:
(1) Identify the statewide needs, goals, objectives, and outcomes
for housing for a five-year time period. Goals should include targets
of the total number of affordable homes created and preserved
with the funds.
(2) Promote a geographically balanced distribution of funds
including consideration of a direct allocation of funds to local
governments.
(3) Emphasize investments that serve households that are at or
below 60 percent of area median income.
(4) Meet the following minimum objectives:
(A) Encourage economic development and job creation by
helping to meet the housing needs of a growing workforce up to
120 percent of area median income.
(B) Identify opportunities for coordination among state
departments and agencies to achieve greater efficiencies, increase
the amount of federal investment in production, services, and
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operating costs of housing, and promote energy efficiency in
housing produced.
(C) Incentivize the use and coordination of nontraditional
funding sources including philanthropic funds, local realignment
funds, nonhousing tax increment, the federal Patient Protection
and Affordable Care Act, and other resources.
(D) Incentivize innovative approaches that produce cost savings
to local and state services by reducing the instability of housing
for frequent, high-cost users of hospitals, jails, detoxification
facilities, psychiatric hospitals, and emergency shelters.
(b) Before submitting the Building Homes and Jobs Investment
Strategy to the Legislature, the department shall hold at least four
public workshops in different regions of the state to further inform
the development of the investment strategy.
(c) The department shall form an advisory body of experts and
stakeholders to help develop the Building Homes and Jobs
Investment Strategy, including, but not limited to, representatives
from the banking and financial sector, real estate sector, real estate
and housing developers, and homeless service providers.
(d) Expenditure requests contained in the Governor's proposed
budget shall be consistent with the Building Homes and Jobs
Investment Strategy developed and submitted pursuant to this part.
Moneys in the Building Homes and Jobs Act Fund shall be
appropriated through the annual Budget Act.
(e) The Building Homes and Jobs Investment Strategy and
updates required by this section shall be submitted pursuant to
Section 9795 of the Government Code.
Article 2. Audits and Reporting
50475. The California State Auditor's Office 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. (a) 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, including efforts to promote a geographically
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balanced distribution of funds. The report shall also assess the
impact of the investment on job creation and the economy. With
respect to any awards made specifically to house or support persons
who are homeless or at -risk of homelessness, the report shall
include an analysis of the effectiveness of the funding in allowing
these households to retain permanent housing. The department
shall make the report available to the public on its Internet Web
site.
(b) (1) In the report, the department shall make a determination
of whether any of the moneys derived from fees collected pursuant
to Section 27388.1 of the Government Code are being allocated
by the state for any purpose not authorized by Section 50470 and
shall share the information with the county recorders.
(2) If the department determines that any moneys derived from
fees collected pursuant to Section 27388.1 of the Government
Code are being allocated by the state for a purpose not authorized
by Section 50470, the county recorders shall, upon notice of the
determination, immediately cease collection of the fees imposed
by Section 27388.1 of the Government Code, and shall resume
collection of those fees only upon notice that the moneys derived
from fees collected pursuant to Section 23788.1 of the Government
Code are being allocated by the state only for a purpose authorized
by Section 50470.
SEC. 5. (a) The Legislature finds and declares that the housing
market plays a critical role in the functioning of the California
economy.
(b) The Legislature further finds and declares all of the
following:
(1) The need for housing is something every Californian
encounters.
(2) Adequate and stable housing is a crucial component of all
Californians'quality of life.
(3) The expenditure for housing is one of the largest expenses
all Californians undertake in their day-to-day lives.
(4) Housing and housing -related activities are ofsuch significant
importance to the state that it warrants a clear and unified voice
in state government.
(c) It is the intent of the Legislature to enact legislation that
would create a Secretary of Housing within state government to
oversee all activities related to housing in the state. In creating
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this position, it is the intent of the Legislature that all professional
entities that play a role in the housing market would be authorized
to be incorporated in order to have a clearer and more unified
approach to housing in California.
SEG. 5.
SEC. 6. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B 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.
SFr.
SEC. 7. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
In order to provide affordable housing opportunities at the earliest
possible time, it is necessary for this act to take effect immediately.
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AMENDED IN ASSEMBLY APRIL 16, 2015
AMENDED IN ASSEMBLY APRIL 6, 2015
AMENDED IN ASSEMBLY MARCH 2, 2015
CALIFORNIA LEGISLATURE -2015-16 REGULAR SESSION
ASSEMBLY BILL
No. 35
Introduced by Assembly Members Chiu and Atkins
(Principal coauthor: Assembly Member Wilk)
(Coauthor. Coauthors: Assembly Member Members Chau and Steinorth)
December 1, 2014
An act to amend Sections 12206, 17058, and 23610.5 of the Revenue and Taxation
Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 35, as amended, Chiu. Income taxes: credits: low-income housing: allocation
increase.
Existing law establishes a low-income housing tax credit program pursuant to which
the California Tax Credit Allocation Committee provides procedures and requirements for
the allocation of state insurance, personal income, and corporation income tax credit
amounts among low-income housing projects based on federal law. Existing law, in
modified conformity to federal income tax law, allows the credit based upon the
applicable percentage, as defined, of the qualified basis of each qualified low-income
building. Existing law limits the total annual amount of the credit that the committee
may allocate to $70 million per year, as specified.
This bill, for calendar years beginning 2015, would increase the aggregate housing
credit dollar amount that may be allocated among low-income housing projects by
$300,000,000, as specified. The bill, under the insurance taxation law, the Personal
Income Tax Law, and the Corporation Tax Law, would modify the definition of applicable
percentage relating to qualified low-income buildings that meet specified criteria.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes. State -mandated local
program: no.
The people of the State of California do enact as follows:
P2 1 SECTION 1.
Section 12206 of the Revenue and Taxation Code
2 is amended to read:
3 12206.
(a) (1) There shall be allowed as a credit against the
4 "tax," as described by Section 12201, a state low-income housing
5 tax credit in an amount equal to the amount determined in
6 subdivision (c), computed in accordance with Section 42 of the
7 Internal Revenue Code except as otherwise provided in this section.
8 (2) "Taxpayer," for purposes of this section, means the sole
9 owner in the case of a "C" corporation, the partners in the case of
10 a partnership, members in the case of a limited liability company,
11 and the shareholders in the case of an "S" corporation.
12 (3) "Housing sponsor," for purposes of this section, means the
13 sole owner in the case of a "C" corporation, the partnership in the
14 case of a partnership, the limited liability company in the case of
15 a limited liability company, and the "S" corporation in the case of
16 an "S" corporation.
17 (4) "Extremely low-income" has the same meaning as in Section
18 50053 of the Health and Safety Code.
19 (5) "Rural area" means a rural area as defined in Section
20 50199.21 of the Health and Safety Code.
21 (6) "Special needs housing" has the meaning as in paragraph
22 (4) of subdivision (g) of Section 10325 of Title 4 of the California
23 Code of Regulations.
24 (7) "SRO" means single room occupancy.
25 (8) "Very low-income" has the same meaning as in Section
26 50053 of the Health and Safety Code."
P3 1 (b) (1) The amount of the credit allocated to any housing
2 sponsor shall be authorized by the California Tax Credit Allocation
3 Committee, or any successor thereof, based on a project's need
4 for the credit for economic feasibility in accordance with the
5 requirements of this section.
6 (A) Except for projects to provide farmworker housing, as
7 defined in subdivision (h) of Section 50199.7 of the Health and
8 Safety Code, that are allocated credits solely under the set-aside
9 described in subdivision (c) of Section 50199.20 of the Health and
10 Safety Code, the low-income housing project shall be located in
11 California and shall meet either of the following requirements:
12 (i) The project's housing sponsor has been allocated by the
13 California Tax Credit Allocation Committee a credit for federal
14 income tax purposes under Section 42 of the Internal Revenue
15 Code.
16 (ii) It qualifies for a credit under Section 42(h)(4)(B) of the
17 Internal Revenue Code.
18 (B) The California Tax Credit Allocation Committee shall not
19 require fees for the credit under this section in addition to those
20 fees required for applications for the tax credit pursuant to Section
21 42 of the Internal Revenue Code. The committee may require a
22 fee if the application for the credit under this section is submitted
23 in a calendar year after the year the application is submitted for
24 the federal tax credit.
25 (C) (i) For a project that receives a preliminary reservation of
26 the state low-income housing tax credit, allowed pursuant to
27 subdivision (a), on or after January 1, 2009, and before January 1,
28 2016, the credit shall be allocated to the partners of a partnership
29 owning the project in accordance with the partnership agreement,
30 regardless of how the federal low-income housing tax credit with
31 respect to the project is allocated to the partners, or whether the
32 allocation of the credit under the terms of the agreement has
33 substantial economic effect, within the meaning of Section 704(b)
34 of the Internal Revenue Code.
35 (ii) This subparagraph shall not apply to a project that receives
36 a preliminary reservation of state low-income housing tax credits
37 under the set-aside described in subdivision (c) of Section 50199.20
38 of the Health and Safety Code unless the project also receives a
39 preliminary reservation of federal low-income housing tax credits.
P4 1 (iii) This subparagraph shall cease to be operative with respect
2 to any project that receives a preliminary reservation of a credit
3 on or after January 1, 2016.
4 (2) (A) The California Tax Credit Allocation Committee shall
5 certify to the housing sponsor the amount of tax credit under this
6 section allocated to the housing sponsor for each credit period.
7 (B) In the case of a partnership or an "S" corporation, the
8 housing sponsor shall provide a copy of the California Tax Credit
9 Allocation Committee certification to the taxpayer.
10 (C) The taxpayer shall attach a copy of the certification to any
11 return upon which a tax credit is claimed under this section.
12 (D) In the case of a failure to attach a copy of the certification
13 for the year to the return in which a tax credit is claimed under this
14 section, no credit under this section shall be allowed for that year
15 until a copy of that certification is provided.
16 (E) All elections made by the taxpayer pursuant to Section 42
17 of the Internal Revenue Code shall apply to this section.
18 (F) (i) The California Tax Credit Allocation Committee may
19 allocate a credit under this section in exchange for a credit allocated
20 pursuant to Section 42(d)(5)(B) of the Internal Revenue Code in
21 amounts up to 30 percent of the eligible basis of a building if the
22 credits allowed under Section 42 of the Internal Revenue Code are
23 reduced by an equivalent amount.
24 (ii) An equivalent amount shall be determined by the California
25 Tax Credit Allocation Committee based upon the relative amount
26 required to produce an equivalent state tax credit to the taxpayer.
27 (c) Section 42(b) of the Internal Revenue Code shall be modified
28 as follows:
29 (1) In the case of any qualified low-income building that is a
30 new building not federally subsidized, the term "applicable
31 percentage" means the following:
32 (A) For each of the first three years, the percentage prescribed
33 by the Secretary of the Treasury for new buildings that are not
34 federally subsidized for the taxable year, determined in accordance
35 with the requirements of Section 42(b)(1) of the Internal Revenue
36 Code in lieu of the percentage prescribed in Section 42(b)(1)(A)
37 of the Internal Revenue Code.
38 (B) For the fourth year, the difference between 30 percent and
39 the sum of the applicable percentages for the first three years.
P5 1 (2) In the case of any qualified low-income building that (i) is
2 a new building, (ii) not located in designated difficult development
3 areas (DDAs) or qualified census tracts (QCTs), as defined in
4 Section 42(d)(5)(8) of the Internal Revenue Code,
5 and (iii) is federally subsidized, the term "applicable percentage"
6 means for the first three years, 15 percent of the qualified basis of
7 the building, and for the fourth year, 5 percent of the qualified
8 basis of the building.
9 (3) In the case of any qualified low-income building that is (i)
10 an existing building, (ii) not located in designated difficult
11 development areas (DDAs) or qualified census tracts (QCTs), as
12 defined in Section 42(d)(5)(8) of the Internal Revenue
13 Code, and (iii) is federally subsidized, the term applicable
14 percentage means the following:
15 (A) For each of the first three years, the percentage prescribed
16 by the Secretary of the Treasury for new buildings that are federally
17 subsidized for the taxable year.
18 (B) For the fourth year, the difference between 13 percent and
19 the sum of the applicable percentages for the first three years.
20 (4) In the case of any qualified low-income building that is (i)
21 a new or an existing building, (ii) located in designated difficult
22 development areas (DDAs) or qualified census tracts (QCTs) as
23 defined in Section 42(d)(5)(B) of the Internal Revenue Code, and
24 (iii) federally subsidized, the California Tax Credit Allocation
25 Committee shall determine the amount of credit to be allocated
26 under subparagraph (F) of paragraph (2) of subdivision (b) required
27 to produce an equivalent state tax credit to the taxpayer, as
28 produced in paragraph (2), taking into account the basis boost
29 provided under Section 42(d)(5)(B) of the Internal Revenue Code.
30 (5) In the case of any qualified low-income building that meets
31 all of the requirements of subparagraphs (A) through (D), inclusive,
32 the term "applicable percentage" means 30 percent for each of the
33 first three years and 5 percent for the fourth year.
34 (A) The qualified low-income building is at least 15 years old.
35 (B) The qualified low-income building is a SRO, special needs
36 housing, is in a rural area, or serves households with very
37 low-income or extremely low-income residents.
38 (C) The qualified low-income building is serving households
39 of very low-income or extremely low-income provided that the
40 average income at time admission is not more than 45 percent of
P6 1 the median gross income, as determined under Section 42 of the
2 Internal Revenue Code, adjusted by household size.
3 (D) The qualified low-income building would have insufficient
4 credits under paragraphs (1) and (2) to complete substantial
5 rehabilitation due to a low appraised value.
6 (d) The term "qualified low-income housing project" as defined
7 in Section 42(c)(2) of the Internal Revenue Code is modified by
8 adding the following requirements:
9 (1) The taxpayer shall be entitled to receive a cash distribution
10 from the operations of the project, after funding required reserves,
11 that, at the election of the taxpayer, is equal to:
12 (A) An amount not to exceed 8 percent of the lesser of:
13 (i) The owner equity that shall include the amount of the capital
14 contributions actually paid to the housing sponsor and shall not
15 include any amounts until they are paid on an investor note.
16 (ii) Twenty percent of the adjusted basis of the building as of
17 the close of the first taxable year of the credit period.
18 (B) The amount of the cashflow from those units in the building
19 that are not low-income units. For purposes of computing cashflow
20 under this subparagraph, operating costs shall be allocated to the
21 low-income units using the "floor space fraction," as defined in
22 Section 42 of the Internal Revenue Code.
23 (C) Any amount allowed to be distributed under subparagraph
24 (A) that is not available for distribution during the first five years
25 of the compliance period may be accumulated and distributed any
26 time during the first 15 years of the compliance period but not
27 thereafter.
28 (2) The limitation on return shall apply in the aggregate to the
29 partners if the housing sponsor is a partnership and in the aggregate
30 to the shareholders if the housing sponsor is an "S" corporation.
P7
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(3) The housing sponsor shall apply any cash available for
distribution in excess of the amount eligible to be distributed under
paragraph (1) to reduce the rent on rent -restricted units or to
increase the number of rent -restricted units subject to the tests of
Section 42(8)(1) of the Internal Revenue Code.
(e) The provisions of Section 42(f) of the Internal Revenue Code
shall be modified as follows:
(1) The term "credit period" as defined in Section 42(f)(1) of
the Internal Revenue Code is modified by substituting "four taxable
years" for "10 taxable years."
(2) The special rule for the first taxable year of the credit period
under Section 42(f)(2) of the Internal Revenue Code shall not apply
to the tax credit under this section.
(3) Section 42(f)(3) of the Internal Revenue Code is modified
to read:
If, as of the close of any taxable year in the compliance period,
after the first year of the credit period, the qualified basis of any
building exceeds the qualified basis of that building as of the close
of the first year of the credit period, the housing sponsor, to the
extent of its tax credit allocation, shall be eligible for a credit on
the excess in an amount equal to the applicable percentage
determined pursuant to subdivision (c) for the four-year period
beginning with the the taxable year in which the increase in
qualified basis occurs.
(f) The provisions of Section 42(h) of the Internal Revenue
Code shall be modified as follows:
(1) Section 42(h)(2) of the Internal Revenue Code shall not be
applicable and instead the following provisions shall be applicable:
The total amount for the four-year credit period of the housing
credit dollars allocated in a calendar year to any building shall
reduce the aggregate housing credit dollar amount of the California
Tax Credit Allocation Committee for the calendar year in which
the allocation is made.
(2) Paragraphs (3), (4), (5), (6)(E)(i)(II), (6)(F), (6)(G), (6)(I),
(7), and (8) of Section 42(h) of the Internal Revenue Code shall
not be applicable.
(g) The aggregate housing credit dollar amount that may be
allocated annually by the California Tax Credit Allocation
Committee pursuant to this section, Section 17058, and Section
23610.5 shall be an amount equal to the sum of all the following:
(1) (A) Seventy million dollars ($70,000,000) for the 2001
calendar year, and, for the 2002 calendar year and each calendar
year thereafter, seventy million dollars ($70,000,000) increased
by the percentage, if any, by which the Consumer Price Index for
the preceding calendar year exceeds the Consumer Price Index for
the 2001 calendar year. For the purposes of this paragraph, the
term "Consumer Price Index" means the last Consumer Price Index
for All Urban Consumers published by the federal Department of
Labor.
(B) An additional three hundred million dollars ($300,000,000)
for the 2015 calendar year, and, for the 2016 calendar year and
each calendar year thereafter, three hundred million dollars
($300,000,000) increased by the percentage, if any, by which the
Consumer Price Index for the preceding calendar year exceeds the
Consumer Price Index for the 2015 calendar year. For the purposes
of this paragraph, the term "Consumer Price Index" means the last
8 Consumer Price Index for All Urban Consumers published by the
9 federal Department of Labor. A housing sponsor receiving an
10 allocation under paragraph (1) of subdivision (c) shall not be
11 eligible for receipt of the housing credit allocated from the
12 increased amount under this subparagraph. A housing sponsor
13 receiving an allocation under paragraph (1) of subdivision (c) shall
14 remain eligible for receipt of the housing credit allocated from the
15 credit ceiling amount under subparagraph (A).
16 (2) The unused housing credit ceiling, if any, for the preceding
17 calendar years.
18 (3) The amount of housing credit ceiling returned in the calendar
19 year. For purposes of this paragraph, the amount of housing credit
20 dollar amount returned in the calendar year equals the housing
21 credit dollar amount previously allocated to any project that does
22 not become a qualified low-income housing project within the
23 period required by this section or to any project with respect to
24 which an allocation is canceled by mutual consent of the California
25 Tax Credit Allocation Committee and the allocation recipient.
26 (4) Five hundred thousand dollars ($500,000) per calendar year
27 for projects to provide farmworker housing, as defined in
28 subdivision (h) of Section 50199.7 of the Health and Safety Code.
29 (5) The amount of any unallocated or returned credits under
30 former Sections 17053.14, 23608.2, and 23608.3, as those sections
31 read prior to January 1, 2009, until fully exhausted for projects to
32 provide farmworker housing, as defined in subdivision (h) of
33 Section 50199.7 of the Health and Safety Code.
34 (h) The term "compliance period" as defined in Section 42(i)(1)
35 of the Internal Revenue Code is modified to mean, with respect to
36 any building, the period of 30 consecutive taxable years beginning
37 with the first taxable year of the credit period with respect thereto.
38 (i) (1) Section 42(j) of the Internal Revenue Code shall not be
39 applicable and the provisions in paragraph (2) shall be substituted
40 in its place.
P9 1 (2) The requirements of this section shall be set forth in a
2 regulatory agreement between the California Tax Credit Allocation
3 Committee and the housing sponsor, and the regulatory agreement
4 shall be subordinated, when required, to any lien or encumbrance
5 of any banks or other institutional lenders to the project. The
6 regulatory agreement entered into pursuant to subdivision (f) of
7 Section 50199.14 of the Health and Safety Code, shall apply,
8 provided that the agreement includes all of the following
9 provisions:
10 (A) A term not less than the compliance period.
11 (B) A requirement that the agreement be recorded in the official
12 records of the county in which the qualified low-income housing
13 project is located.
14 (C) A provision stating which state and local agencies can
15 enforce the regulatory agreement in the event the housing sponsor
16 fails to satisfy any of the requirements of this section.
17 (D) A provision that the regulatory agreement shall be deemed
18 a contract enforceable by tenants as third -party beneficiaries thereto
19 and that allows individuals, whether prospective, present, or former
20 occupants of the building, who meet the income limitation
21 applicable to the building, the right to enforce the regulatory
22 agreement in any state court.
23 (E) A provision incorporating the requirements of Section 42
24 of the Internal Revenue Code as modified by this section.
25 (F) A requirement that the housing sponsor notify the California
26 Tax Credit Allocation Committee or its designee and the local
27 agency that can enforce the regulatory agreement if there is a
28 determination by the Internal Revenue Service that the project is
29 not in compliance with Section 42(g) of the Internal Revenue Code.
30 (G) A requirement that the housing sponsor, as security for the
31 performance of the housing sponsor's obligations under the
32 regulatory agreement, assign the housing sponsor's interest in rents
33 that it receives from the project, provided that until there is a
34 default under the regulatory agreement, the housing sponsor is
35 entitled to collect and retain the rents.
36 (H) The remedies available in the event of a default under the
37 regulatory agreement that is not cured within a reasonable cure
38 period, include, but are not limited to, allowing any of the parties
39 designated to enforce the regulatory agreement to collect all rents
40 with respect to the project; taking possession of the project and
P10 1 operating the project in accordance with the regulatory agreement
2 until the enforcer determines the housing sponsor is in a position
3 to operate the project in accordance with the regulatory agreement;
4 applying to any court for specific performance; securing the
5 appointment of a receiver to operate the project; or any other relief
6 as may be appropriate.
7 (j) (1) The committee shall allocate the housing credit on a
8 regular basis consisting of two or more periods in each calendar
9 year during which applications may be filed and considered. The
10 committee shall establish application filing deadlines, the maximum
11 percentage of federal and state low-income housing tax credit
12 ceiling that may be allocated by the committee in that period, and
13 the approximate date on which allocations shall be made. If the
14 enactment of federal or state law, the adoption of rules or
15 regulations, or other similar events prevent the use of two allocation
16 periods, the committee may reduce the number of periods and
17 adjust the filing deadlines, maximum percentage of credit allocated,
18 and allocation dates.
19 (2) The committee shall adopt a qualified allocation plan, as
20 provided in Section 42(m)(1) of the Internal Revenue Code. In
21 adopting this plan, the committee shall comply with the provisions
22 of Sections 42(m)(1)(B) and 42(m)(1)(C) of the Internal Revenue
23 Code, respectively.
24 (3) Notwithstanding Section 42(m) of the Internal Revenue
25 Code the California Tax Credit Allocation Committee shall allocate
26 housing credits in accordance with the qualified allocation plan
27 and regulations, which shall include the following provisions:
28 (A) All housing sponsors, as defined by paragraph (3) of
29 subdivision (a), shall demonstrate at the time the application is
30 filed with the committee that the project meets the following
31 threshold requirements:
32 (i) The housing sponsor shall demonstrate there is a need and
33 demand for low-income housing in the community or region for
34 which it is proposed.
35 (ii) The project's proposed financing, including tax credit
36 proceeds, shall be sufficient to complete the project and that the
37 proposed operating income shall be adequate to operate the project
38 for the extended use period.
P11 1 (iii) The project shall have enforceable financing commitments,
2 either construction or permanent financing, for at least 50 percent
3 of the total estimated financing of the project.
4 (iv) The housing sponsor shall have and maintain control of the
5 site for the project.
6 (v) The housing sponsor shall demonstrate that the project
7 complies with all applicable local land use and zoning ordinances.
8 (vi) The housing sponsor shall demonstrate that the project
9 development team has the experience and the financial capacity
10 to ensure project completion and operation for the extended use
11 period.
12 (vii) The housing sponsor shall demonstrate the amount of tax
13 credit that is necessary for the financial feasibility of the project
14 and its viability as a qualified low-income housing project
15 throughout the extended use period, taking into account operating
16 expenses, a supportable debt service, reserves, funds set aside for
17 rental subsidies, and required equity, and a development fee that
18 does not exceed a specified percentage of the eligible basis of the
19 project prior to inclusion of the development fee in the eligible
20 basis, as determined by the committee.
21 (B) The committee shall give a preference to those projects
22 satisfying all of the threshold requirements of subparagraph (A)
23 if both of the following apply:
24 (i) The project serves the lowest income tenants at rents
25 affordable to those tenants.
26 (ii) The project is obligated to serve qualified tenants for the
27 longest period.
28 (C) In addition to the provisions of subparagraphs (A) and (B),
29 the committee shall use the following criteria in allocating housing
30 credits:
31 (i) Projects serving large families in which a substantial number,
32 as defined by the committee, of all residential units are low-income
33 units with three and more bedrooms.
34 (ii) Projects providing single -room occupancy units serving
35 very low income tenants.
36 (iii) (I) Existing projects that are "at risk of conversion."
37 (II) For purposes of this section, the term "at risk of conversion,"
38 with respect to an existing property means a property that satisfies
39 all of the following criteria:
P12 1 (ia) The property is a multifamily rental housing development
2 in which at least 50 percent of the units receive governmental
3 assistance pursuant to any of the following:
4 (Ia) New construction, substantial rehabilitation, moderate
5 rehabilitation, property disposition, and loan management set-aside
6 programs, or any other program providing project -based assistance
7 pursuant to Section 8 of the United States Housing Act of 1937,
8 Section 1437f of Title 42 of the United States Code, as amended.
9 (Ib) The Below -Market -Interest -Rate Program pursuant to
10 Section 221(d)(3) of the National Housing Act, Sections
11 17151(d)(3) and (5) of Title 12 of the United States Code.
12 (Ic) Section 236 of the National Housing Act, Section 1715z-1
13 of Title 12 of the United States Code.
14 (Id) Programs for rent supplement assistance pursuant to Section
15 18 101 of the Housing and Urban Development Act of 1965,
16 Section 1701s of Title 12 of the United States Code, as amended.
17 (Ie) Programs pursuant to Section 515 of the Housing Act of
18 1949, Section 1485 of Title 42 of the United States Code, as
19 amended.
20 (If) The low-income housing credit program set forth in Section
21 42 of the Internal Revenue Code.
22 (ib) The restrictions on rent and income levels will terminate
23 or the federal insured mortgage on the property is eligible for
24 prepayment any time within five years before or after the date of
25 application to the California Tax Credit Allocation Committee.
26 (ic) The entity acquiring the property enters into a regulatory
27 agreement that requires the property to be operated in accordance
28 with the requirements of this section for a period equal to the
29 greater of 55 years or the life of the property.
30 (id) The property satisfies the requirements of Section 42(e) of
31 the Internal Revenue Code, regarding rehabilitation expenditures
32 except that the provisions of Section 42(e)(3)(A)(ii)(I) shall not
33 apply.
34 (iv) Projects for which a public agency provides direct or indirect
35 long-term financial support for at least 15 percent of the total
36 project development costs or projects for which the owner's equity
37 constitutes at least 30 percent of the total project development
38 costs.
39 (v) Projects that provide tenant amenities not generally available
40 to residents of low-income housing projects.
P13 1 (4) For purposes of allocating credits pursuant to this section,
2 the committee shall not give preference to any project by virtue
3 of the date of submission of its application except to break a tie
4 when two or more of the projects have an equal rating.
5 (k) Section 42(/) of the Internal Revenue Code shall be modified
6 as follows:
7 The term "secretary" shall be replaced by the term "California
8 Franchise Tax Board."
9 (/) In the case where the credit allowed under this section
10 exceeds the "tax," the excess may be carried over to reduce the
11 "tax" in the following year, and succeeding years if necessary,
12 until the credit has been exhausted.
13 (m) The provisions of Section 11407(a) of Public Law 101-508,
14 relating to the effective date of the extension of the low-income
15 housing credit, shall apply to calendar years after 1993.
16 (n) The provisions of Section 11407(c) of Public Law 101-508,
17 relating to election to accelerate credit, shall not apply.
18 (o) This section shall remain in effect for as long as Section 42
19 of the Internal Revenue Code, relating to low-income housing
20 credit, remains in effect.
21 SEC. 2.
Section 17058 of the Revenue and Taxation Code is
22 amended to read:
23 17058.
(a) (1) There shall be allowed as a credit against the
24 "net tax," as defined in Section 17039, a state low-income housing
25 tax credit in an amount equal to the amount determined in
26 subdivision (c), computed in accordance with Section 42 of the
27 Internal Revenue Code except as otherwise provided in this section.
28 (2) "Taxpayer" for purposes of this section means the sole owner
29 in the case of an individual, the partners in the case of a partnership,
30 members in the case of a limited liability company, and the
31 shareholders in the case of an "S" corporation.
32 (3) "Housing sponsor" for purposes of this section means the
33 sole owner in the case of an individual, the partnership in the case
34 of a partnership, the limited liability company in the case of a
35 limited liability company, and the "S" corporation in the case of
36 an "S" corporation.
37 (4) "Extremely low-income" has the same meaning as in Section
38 50053 of the Health and Safety Code.
39 (5) "Rural area" means a rural area as defined in Section
40 50199.21 of the Health and Safety Code.
P14 1 (6) "Special needs housing" has the meaning as in paragraph
2 (4) of subdivision (g) of Section 10325 of Title 4 of the California
3 Code of Regulations.
4 (7) "SRO" means single room occupancy.
5 (8) "Very low-income" has the same meaning as in Section
6 50053 of the Health and Safety Code."
7 (b) (1) The amount of the credit allocated to any housing
8 sponsor shall be authorized by the California Tax Credit Allocation
9 Committee, or any successor thereof, based on a project's need
10 for the credit for economic feasibility in accordance with the
11 requirements of this section.
12 (A) The low-income housing project shall be located in
13 California and shall meet either of the following requirements:
14 (i) Except for projects to provide farmworker housing, as defined
15 in subdivision (h) of Section 50199.7 of the Health and Safety
16 Code, that are allocated credits solely under the set-aside described
17 in subdivision (c) of Section 50199.20 of the Health and Safety
18 Code, the project's housing sponsor has been allocated by the
19 California Tax Credit Allocation Committee a credit for federal
20 income tax purposes under Section 42 of the Internal Revenue
21 Code.
22 (ii) It qualifies for a credit under Section 42(h)(4)(B) of the
23 Internal Revenue Code.
24 (B) The California Tax Credit Allocation Committee shall not
25 require fees for the credit under this section in addition to those
26 fees required for applications for the tax credit pursuant to Section
27 42 of the Internal Revenue Code. The committee may require a
28 fee if the application for the credit under this section is submitted
29 in a calendar year after the year the application is submitted for
30 the federal tax credit.
31 (C) (i) For a project that receives a preliminary reservation of
32 the state low-income housing tax credit, allowed pursuant to
33 subdivision (a), on or after January 1, 2009, and before January 1,
34 2016, the credit shall be allocated to the partners of a partnership
35 owning the project in accordance with the partnership agreement,
36 regardless of how the federal low-income housing tax credit with
37 respect to the project is allocated to the partners, or whether the
38 allocation of the credit under the terms of the agreement has
39 substantial economic effect, within the meaning of Section 704(b)
40 of the Internal Revenue Code.
P15 1 (ii) To the extent the allocation of the credit to a partner under
2 this section lacks substantial economic effect, any loss or deduction
3 otherwise allowable under this part that is attributable to the sale
4 or other disposition of that partner's partnership interest made prior
5 to the expiration of the federal credit shall not be allowed in the
6 taxable year in which the sale or other disposition occurs, but shall
7 instead be deferred until and treated as if it occurred in the first
8 taxable year immediately following the taxable year in which the
9 federal credit period expires for the project described in clause (i).
10 (iii) This subparagraph shall not apply to a project that receives
11 a preliminary reservation of state low-income housing tax credits
12 under the set-aside described in subdivision (c) of Section 50199.20
13 of the Health and Safety Code unless the project also receives a
14 preliminary reservation of federal low-income housing tax credits.
15 (iv) This subparagraph shall cease to be operative with respect
16 to any project that receives a preliminary reservation of a credit
17 on or after January 1, 2016.
18 (2) (A) The California Tax Credit Allocation Committee shall
19 certify to the housing sponsor the amount of tax credit under this
20 section allocated to the housing sponsor for each credit period.
21 (B) In the case of a partnership, limited liability company, or
22 an "S" corporation, the housing sponsor shall provide a copy of
23 the California Tax Credit Allocation Committee certification to
24 the taxpayer.
25 (C) The taxpayer shall, upon request, provide a copy of the
26 certification to the Franchise Tax Board.
27 (D) All elections made by the taxpayer pursuant to Section 42
28 of the Internal Revenue Code shall apply to this section.
29 (E) (i) The California Tax Credit Allocation Committee may
30 allocate a credit under this section in exchange for a credit allocated
31 pursuant to Section 42(d)(5)(B) of the Internal Revenue Code in
32 amounts up to 30 percent of the eligible basis of a building if the
33 credits allowed under Section 42 of the Internal Revenue Code are
34 reduced by an equivalent amount.
35 (ii) An equivalent amount shall be determined by the California
36 Tax Credit Allocation Committee based upon the relative amount
37 required to produce an equivalent state tax credit to the taxpayer.
38 (c) Section 42(b) of the Internal Revenue Code shall be modified
39 as follows:
P16 1 (1) In the case of any qualified low-income building that is a
2 new building not federally subsidized, the term "applicable
3 percentage" means the following:
4 (A) For each of the first three years, the percentage prescribed
5 by the Secretary of the Treasury for new buildings that are not
6 federally subsidized for the taxable year, determined in accordance
7 with the requirements of Section 42(b)(1) of the Internal Revenue
8 Code in lieu of the percentage prescribed in Section 42(b)(1)(A)
9 of the Internal Revenue Code.
10 (B) For the fourth year, the difference between 30 percent and
11 the sum of the applicable percentages for the first three years.
12 (2) In the case of any qualified low-income building that (i) is
13 a new building, (ii) not located in designated difficult development
14 areas (DDAs) or qualified census tracts (QCTs), as defined in
15 Section 42(d)(5)(8) of the Internal Revenue Code,
16 and (iii) is federally subsidized, the term "applicable percentage"
17 means for the first three years, 15 percent of the qualified basis of
18 the building, and for the fourth year, 5 percent of the qualified
19 basis of the building.
20 (3) In the case of any qualified low-income building that is (i)
21 an existing building, (ii) not located in designated difficult
22 development areas (DDAs) or qualified census tracts (QCTs), as
23 defined in Section 42(d)(5)(8) of the Internal Revenue
24 Code, and (iii) is federally subsidized, the term applicable
25 percentage means the following:
26 (A) For each of the first three years, the percentage prescribed
27 by the Secretary of the Treasury for new buildings that are federally
28 subsidized for the taxable year.
29 (B) For the fourth year, the difference between 13 percent and
30 the sum of the applicable percentages for the first three years.
31 (4) In the case of any qualified low-income building that is (i)
32 a new or an existing building, (ii) located in designated difficult
33 development areas (DDAs) or qualified census tracts (QCTs) as
34 defined in Section 42(d)(5)(B) of the Internal Revenue Code, and
35 (iii) federally subsidized, the California Tax Credit Allocation
36 Committee shall determine the amount of credit to be allocated
37 under subparagraph (E) of paragraph (2) of subdivision (b) required
38 to produce an equivalent state tax credit to the taxpayer, as
39 produced in paragraph (2), taking into account the basis boost
40 provided under Section 42(d)(5)(B) of the Internal Revenue Code.
P17 1 (5) In the case of any qualified low-income building that meets
2 all of the requirements of subparagraphs (A) through (D), inclusive,
3 the term "applicable percentage" means 30 percent for each of the
4 first three years and 5 percent for the fourth year.
5 (A) The qualified low-income building is at least 15 years old.
6 (B) The qualified low-income building is a SRO, special needs
7 housing, is in a rural area, or serves households with very
8 low-income or extremely low-income residents.
9 (C) The qualified low-income building is serving households
10 of very low-income or extremely low-income provided that the
11 average income at time admission is not more than 45 percent of
12 the median gross income, as determined under Section 42 of the
13 Internal Revenue Code, adjusted by household size.
14 (D) The qualified low-income building would have insufficient
15 credits under paragraphs (1) and (2) to complete substantial
16 rehabilitation due to a low appraised value.
17 (d) The term "qualified low-income housing project" as defined
18 in Section 42(c)(2) of the Internal Revenue Code is modified by
19 adding the following requirements:
20 (1) The taxpayer shall be entitled to receive a cash distribution
21 from the operations of the project, after funding required reserves,
22 that, at the election of the taxpayer, is equal to:
23 (A) An amount not to exceed 8 percent of the lesser of:
24 (i) The owner equity that shall include the amount of the capital
25 contributions actually paid to the housing sponsor and shall not
26 include any amounts until they are paid on an investor note.
27 (ii) Twenty percent of the adjusted basis of the building as of
28 the close of the first taxable year of the credit period.
29 (B) The amount of the cashflow from those units in the building
30 that are not low-income units. For purposes of computing cashflow
31 under this subparagraph, operating costs shall be allocated to the
32 low-income units using the "floor space fraction," as defined in
33 Section 42 of the Internal Revenue Code.
34 (C) Any amount allowed to be distributed under subparagraph
35 (A) that is not available for distribution during the first five years
36 of the compliance period may be accumulated and distributed any
37 time during the first 15 years of the compliance period but not
38 thereafter.
P18 1 (2) The limitation on return shall apply in the aggregate to the
2 partners if the housing sponsor is a partnership and in the aggregate
3 to the shareholders if the housing sponsor is an "S" corporation.
4 (3) The housing sponsor shall apply any cash available for
5 distribution in excess of the amount eligible to be distributed under
6 paragraph (1) to reduce the rent on rent -restricted units or to
7 increase the number of rent -restricted units subject to the tests of
8 Section 42(8)(1) of the Internal Revenue Code.
9 (e) The provisions of Section 42(f) of the Internal Revenue Code
10 shall be modified as follows:
11 (1) The term "credit period" as defined in Section 42(f)(1) of
12 the Internal Revenue Code is modified by substituting "four taxable
13 years" for "10 taxable years."
14 (2) The special rule for the first taxable year of the credit period
15 under Section 42(f)(2) of the Internal Revenue Code shall not apply
16 to the tax credit under this section.
17 (3) Section 42(f)(3) of the Internal Revenue Code is modified
18 to read:
19 If, as of the close of any taxable year in the compliance period,
20 after the first year of the credit period, the qualified basis of any
21 building exceeds the qualified basis of that building as of the close
22 of the first year of the credit period, the housing sponsor, to the
23 extent of its tax credit allocation, shall be eligible for a credit on
24 the excess in an amount equal to the applicable percentage
25 determined pursuant to subdivision (c) for the four-year period
26 beginning with the taxable year in which the increase in qualified
27 basis occurs.
28 (f) The provisions of Section 42(h) of the Internal Revenue
29 Code shall be modified as follows:
30 (1) Section 42(h)(2) of the Internal Revenue Code shall not be
31 applicable and instead the following provisions shall be applicable:
32 The total amount for the four-year credit period of the housing
33 credit dollars allocated in a calendar year to any building shall
34 reduce the aggregate housing credit dollar amount of the California
35 Tax Credit Allocation Committee for the calendar year in which
36 the allocation is made.
37 (2) Paragraphs (3), (4), (5), (6)(E)(i)(II), (6)(F), (6)(G), (6)(I),
38 (7), and (8) of Section 42(h) of the Internal Revenue Code shall
39 not be applicable.
P19 1 (g) The aggregate housing credit dollar amount that may be
2 allocated annually by the California Tax Credit Allocation
3 Committee pursuant to this section, Section 12206, and Section
4 23610.5 shall be an amount equal to the sum of all the following:
5 (1) (A) Seventy million dollars ($70,000,000) for the 2001
6 calendar year, and, for the 2002 calendar year and each calendar
7 year thereafter, seventy million dollars ($70,000,000) increased
8 by the percentage, if any, by which the Consumer Price Index for
9 the preceding calendar year exceeds the Consumer Price Index for
10 the 2001 calendar year. For the purposes of this paragraph, the
11 term "Consumer Price Index" means the last Consumer Price Index
12 for All Urban Consumers published by the federal Department of
13 Labor.
14 (B) An additional three hundred million dollars ($300,000,000)
15 for the 2015 calendar year, and, for the 2016 calendar year and
16 each calendar year thereafter, three hundred million dollars
17 ($300,000,000) increased by the percentage, if any, by which the
18 Consumer Price Index for the preceding calendar year exceeds the
19 Consumer Price Index for the 2015 calendar year. For the purposes
20 of this paragraph, the term "Consumer Price Index" means the last
21 Consumer Price Index for All Urban Consumers published by the
22 federal Department of Labor. A housing sponsor receiving an
23 allocation under paragraph (1) of subdivision (c) shall not be
24 eligible for receipt of the housing credit allocated from the
25 increased amount under this subparagraph. A housing sponsor
26 receiving an allocation under paragraph (1) of subdivision (c) shall
27 remain eligible for receipt of the housing credit allocated from the
28 credit ceiling amount under subparagraph (A).
29 (2) The unused housing credit ceiling, if any, for the preceding
30 calendar years.
31 (3) The amount of housing credit ceiling returned in the calendar
32 year. For purposes of this paragraph, the amount of housing credit
33 dollar amount returned in the calendar year equals the housing
34 credit dollar amount previously allocated to any project that does
35 not become a qualified low-income housing project within the
36 period required by this section or to any project with respect to
37 which an allocation is canceled by mutual consent of the California
38 Tax Credit Allocation Committee and the allocation recipient.
P20 1 (4) Five hundred thousand dollars ($500,000) per calendar year
2 for projects to provide farmworker housing, as defined in
3 subdivision (h) of Section 50199.7 of the Health and Safety Code.
4 (5) The amount of any unallocated or returned credits under
5 former Sections 17053.14, 23608.2, and 23608.3, as those sections
6 read prior to January 1, 2009, until fully exhausted for projects to
7 provide farmworker housing, as defined in subdivision (h) of
8 Section 50199.7 of the Health and Safety Code.
9 (h) The term "compliance period" as defined in Section 42(i)(1)
10 of the Internal Revenue Code is modified to mean, with respect to
11 any building, the period of 30 consecutive taxable years beginning
12 with the first taxable year of the credit period with respect thereto.
13 (i) Section 42(j) of the Internal Revenue Code shall not be
14 applicable and the following requirements of this section shall be
15 set forth in a regulatory agreement between the California Tax
16 Credit Allocation Committee and the housing sponsor, and the
17 regulatory agreement shall be subordinated, when required, to any
18 lien or encumbrance of any banks or other institutional lenders to
19 the project. The regulatory agreement entered into pursuant to
20 subdivision (f) of Section 50199.14 of the Health and Safety Code
21 shall apply, provided that the agreement includes all of the
22 following provisions:
23 (1) A term not less than the compliance period.
24 (2) A requirement that the agreement be recorded in the official
25 records of the county in which the qualified low-income housing
26 project is located.
27 (3) A provision stating which state and local agencies can
28 enforce the regulatory agreement in the event the housing sponsor
29 fails to satisfy any of the requirements of this section.
30 (4) A provision that the regulatory agreement shall be deemed
31 a contract enforceable by tenants as third -party beneficiaries thereto
32 and that allows individuals, whether prospective, present, or former
33 occupants of the building, who meet the income limitation
34 applicable to the building, the right to enforce the regulatory
35 agreement in any state court.
36 (5) A provision incorporating the requirements of Section 42
37 of the Internal Revenue Code as modified by this section.
38 (6) A requirement that the housing sponsor notify the California
P21
P22
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Tax Credit Allocation Committee or its designee if there is a
determination by the Internal Revenue Service that the project is
not in compliance with Section 42(g) of the Internal Revenue Code.
(7) A requirement that the housing sponsor, as security for the
performance of the housing sponsor's obligations under the
regulatory agreement, assign the housing sponsor's interest in rents
that it receives from the project, provided that until there is a
default under the regulatory agreement, the housing sponsor is
entitled to collect and retain the rents.
(8) The remedies available in the event of a default under the
regulatory agreement that is not cured within a reasonable cure
period, include, but are not limited to, allowing any of the parties
designated to enforce the regulatory agreement to collect all rents
with respect to the project; taking possession of the project and
operating the project in accordance with the regulatory agreement
until the enforcer determines the housing sponsor is in a position
to operate the project in accordance with the regulatory agreement;
applying to any court for specific performance; securing the
appointment of a receiver to operate the project; or any other relief
as may be appropriate.
(j) (1) The committee shall allocate the housing credit on a
regular basis consisting of two or more periods in each calendar
year during which applications may be filed and considered. The
committee shall establish application filing deadlines, the maximum
percentage of federal and state low-income housing tax credit
ceiling that may be allocated by the committee in that period, and
the approximate date on which allocations shall be made. If the
enactment of federal or state law, the adoption of rules or
regulations, or other similar events prevent the use of two allocation
periods, the committee may reduce the number of periods and
adjust the filing deadlines, maximum percentage of credit allocated,
and allocation dates.
(2) The committee shall adopt a qualified allocation plan, as
provided in Section 42(m)(1) of the Internal Revenue Code. In
adopting this plan, the committee shall comply with the provisions
of Sections 42(m)(1)(B) and 42(m)(1)(C) of the Internal Revenue
Code, respectively.
(3) Notwithstanding Section 42(m) of the Internal Revenue
Code the California Tax Credit Allocation Committee shall allocate
housing credits in accordance with the qualified allocation plan
and regulations, which shall include the following provisions:
(A) All housing sponsors, as defined by paragraph (3) of
subdivision (a), shall demonstrate at the time the application is
filed with the committee that the project meets the following
threshold requirements:
(i) The housing sponsor shall demonstrate there is a need and
demand for low-income housing in the community or region for
which it is proposed.
(ii) The project's proposed financing, including tax credit
proceeds, shall be sufficient to complete the project and that the
proposed operating income shall be adequate to operate the project
for the extended use period.
(iii) The project shall have enforceable financing commitments,
either construction or permanent financing, for at least 50 percent
of the total estimated financing of the project.
(iv) The housing sponsor shall have and maintain control of the
16 site for the project.
17 (v) The housing sponsor shall demonstrate that the project
18 complies with all applicable local land use and zoning ordinances.
19 (vi) The housing sponsor shall demonstrate that the project
20 development team has the experience and the financial capacity
21 to ensure project completion and operation for the extended use
22 period.
23 (vii) The housing sponsor shall demonstrate the amount of tax
24 credit that is necessary for the financial feasibility of the project
25 and its viability as a qualified low-income housing project
26 throughout the extended use period, taking into account operating
27 expenses, a supportable debt service, reserves, funds set aside for
28 rental subsidies and required equity, and a development fee that
29 does not exceed a specified percentage of the eligible basis of the
30 project prior to inclusion of the development fee in the eligible
31 basis, as determined by the committee.
32 (B) The committee shall give a preference to those projects
33 satisfying all of the threshold requirements of subparagraph (A)
34 if both of the following apply:
35 (i) The project serves the lowest income tenants at rents
36 affordable to those tenants.
37 (ii) The project is obligated to serve qualified tenants for the
38 longest period.
P23 1 (C) In addition to the provisions of subparagraphs (A) and (B),
2 the committee shall use the following criteria in allocating housing
3 credits:
4 (i) Projects serving large families in which a substantial number,
5 as defined by the committee, of all residential units are low-income
6 units with three and more bedrooms.
7 (ii) Projects providing single -room occupancy units serving
8 very low income tenants.
9 (iii) (I) Existing projects that are "at risk of conversion."
10 (II) For purposes of this section, the term "at risk of conversion,"
11 with respect to an existing property means a property that satisfies
12 all of the following criteria:
13 (ia) The property is a multifamily rental housing development
14 in which at least 50 percent of the units receive governmental
15 assistance pursuant to any of the following:
16 (Ia) New construction, substantial rehabilitation, moderate
17 rehabilitation, property disposition, and loan management set-aside
18 programs, or any other program providing project -based assistance
19 pursuant to Section 8 of the United States Housing Act of 1937,
20 Section 1437f of Title 42 of the United States Code, as amended.
21 (Ib) The Below -Market -Interest -Rate Program pursuant to
22 Section 221(d)(3) of the National Housing Act, Sections
23 17151(d)(3) and (5) of Title 12 of the United States Code.
24 (Ic) Section 236 of the National Housing Act, Section 1715z-1
25 of Title 12 of the United States Code.
26 (Id) Programs for rent supplement assistance pursuant to Section
27 18 101 of the Housing and Urban Development Act of 1965,
28 Section 1701s of Title 12 of the United States Code, as amended.
29 (Ie) Programs pursuant to Section 515 of the Housing Act of
30 1949, Section 1485 of Title 42 of the United States Code, as
31 amended.
32 (If) The low-income housing credit program set forth in Section
33 42 of the Internal Revenue Code.
34 (ib) The restrictions on rent and income levels will terminate
35 or the federal insured mortgage on the property is eligible for
36 prepayment any time within five years before or after the date of
37 application to the California Tax Credit Allocation Committee.
38 (ic) The entity acquiring the property enters into a regulatory
39 agreement that requires the property to be operated in accordance
P24 1 with the requirements of this section for a period equal to the
2 greater of 55 years or the life of the property.
3 (id) The property satisfies the requirements of Section 42(e) of
4 the Internal Revenue Code, regarding rehabilitation expenditures
5 except that the provisions of Section 42(e)(3)(A)(ii)(I) shall not
6 apply.
7 (iv) Projects for which a public agency provides direct or indirect
8 long-term financial support for at least 15 percent of the total
9 project development costs or projects for which the owner's equity
10 constitutes at least 30 percent of the total project development
11 costs.
12 (v) Projects that provide tenant amenities not generally available
13 to residents of low-income housing projects.
14 (4) For purposes of allocating credits pursuant to this section,
15 the committee shall not give preference to any project by virtue
16 of the date of submission of its application.
17 (k) Section 42(/) of the Internal Revenue Code shall be modified
18 as follows:
19 The term "secretary" shall be replaced by the term "California
20 Franchise Tax Board."
21 (/) In the case where the credit allowed under this section
22 exceeds the net tax, the excess may be carried over to reduce the
23 net tax in the following year, and succeeding taxable years, if
24 necessary, until the credit has been exhausted.
25 (m) A project that received an allocation of a 1989 federal
26 housing credit dollar amount shall be eligible to receive an
27 allocation of a 1990 state housing credit dollar amount, subject to
28 all of the following conditions:
29 (1) The project was not placed in service prior to 1990.
30 (2) To the extent the amendments made to this section by the
31 Statutes of 1990 conflict with any provisions existing in this section
32 prior to those amendments, the prior provisions of law shall prevail.
33 (3) Notwithstanding paragraph (2), a project applying for an
34 allocation under this subdivision shall be subject to the
35 requirements of paragraph (3) of subdivision (j).
36 (n) The credit period with respect to an allocation of credit in
37 1989 by the California Tax Credit Allocation Committee of which
38 any amount is attributable to unallocated credit from 1987 or 1988
39 shall not begin until after December 31, 1989.
P25 1 (o) The provisions of Section 11407(a) of Public Law 101-508,
2 relating to the effective date of the extension of the low-income
3 housing credit, shall apply to calendar years after 1989.
4 (p) The provisions of Section 11407(c) of Public Law 101-508,
5 relating to election to accelerate credit, shall not apply.
6 (q) Any unused credit may continue to be carried forward, as
7 provided in subdivision (/), until the credit has been exhausted.
8 (r) This section shall remain in effect on and after December 1,
9 1990, for as long as Section 42 of the Internal Revenue Code,
10 relating to low-income housing credit, remains in effect.
11 (s) The amendments to this section made by Chapter 1222 of
12 the Statutes of 1993 shall apply only to taxable years beginning
13 on or after January 1, 1994.
14 SEC. 3.
Section 23610.5 of the Revenue and Taxation Code
15 is amended to read:
16 23610.5.
(a) (1) There shall be allowed as a credit against the
17 "tax," as defined by Section 23036, a state low-income housing
18 tax credit in an amount equal to the amount determined in
19 subdivision (c), computed in accordance with Section 42 of the
20 Internal Revenue Code except as otherwise provided in this section.
21 (2) "Taxpayer," for purposes of this section, means the sole
22 owner in the case of a "C" corporation, the partners in the case of
23 a partnership, members in the case of a limited liability company,
24 and the shareholders in the case of an "S" corporation.
25 (3) "Housing sponsor," for purposes of this section, means the
26 sole owner in the case of a "C" corporation, the partnership in the
27 case of a partnership, the limited liability company in the case of
28 a limited liability company, and the "S" corporation in the case of
29 an "S" corporation.
30 (4) "Extremely low-income" has the same meaning as in Section
31 50053 of the Health and Safety Code.
32 (5) "Rural area" means a rural area as defined in Section
33 50199.21 of the Health and Safety Code.
34 (6) "Special needs housing" has the meaning as in paragraph
35 (4) of subdivision (g) of Section 10325 of Title 4 of the California
36 Code of Regulations.
37 (7) "SRO" means single room occupancy.
38 (8) "Very low-income" has the same meaning as in Section
39 50053 of the Health and Safety Code."
P26 1 (b) (1) The amount of the credit allocated to any housing
2 sponsor shall be authorized by the California Tax Credit Allocation
3 Committee, or any successor thereof, based on a project's need
4 for the credit for economic feasibility in accordance with the
5 requirements of this section.
6 (A) The low-income housing project shall be located in
7 California and shall meet either of the following requirements:
8 (i) Except for projects to provide farmworker housing, as defined
9 in subdivision (h) of Section 50199.7 of the Health and Safety
10 Code, that are allocated credits solely under the set-aside described
11 in subdivision (c) of Section 50199.20 of the Health and Safety
12 Code, the project's housing sponsor has been allocated by the
13 California Tax Credit Allocation Committee a credit for federal
14 income tax purposes under Section 42 of the Internal Revenue
15 Code.
16 (ii) It qualifies for a credit under Section 42(h)(4)(B) of the
17 Internal Revenue Code.
18 (B) The California Tax Credit Allocation Committee shall not
19 require fees for the credit under this section in addition to those
20 fees required for applications for the tax credit pursuant to Section
21 42 of the Internal Revenue Code. The committee may require a
22 fee if the application for the credit under this section is submitted
23 in a calendar year after the year the application is submitted for
24 the federal tax credit.
25 (C) (i) For a project that receives a preliminary reservation of
26 the state low-income housing tax credit, allowed pursuant to
27 subdivision (a), on or after January 1, 2009, and before January 1,
28 2016, the credit shall be allocated to the partners of a partnership
29 owning the project in accordance with the partnership agreement,
30 regardless of how the federal low-income housing tax credit with
31 respect to the project is allocated to the partners, or whether the
32 allocation of the credit under the terms of the agreement has
33 substantial economic effect, within the meaning of Section 704(b)
34 of the Internal Revenue Code.
35 (ii) To the extent the allocation of the credit to a partner under
36 this section lacks substantial economic effect, any loss or deduction
37 otherwise allowable under this part that is attributable to the sale
38 or other disposition of that partner's partnership interest made prior
39 to the expiration of the federal credit shall not be allowed in the
40 taxable year in which the sale or other disposition occurs, but shall
P27 1 instead be deferred until and treated as if it occurred in the first
2 taxable year immediately following the taxable year in which the
3 federal credit period expires for the project described in clause (i).
4 (iii) This subparagraph shall not apply to a project that receives
5 a preliminary reservation of state low-income housing tax credits
6 under the set-aside described in subdivision (c) of Section 50199.20
7 of the Health and Safety Code unless the project also receives a
8 preliminary reservation of federal low-income housing tax credits.
9 (iv) This subparagraph shall cease to be operative with respect
10 to any project that receives a preliminary reservation of a credit
11 on or after January 1, 2016.
12 (2) (A) The California Tax Credit Allocation Committee shall
13 certify to the housing sponsor the amount of tax credit under this
14 section allocated to the housing sponsor for each credit period.
15 (B) In the case of a partnership, limited liability company, or
16 an "S" corporation, the housing sponsor shall provide a copy of
17 the California Tax Credit Allocation Committee certification to
18 the taxpayer.
19 (C) The taxpayer shall, upon request, provide a copy of the
20 certification to the Franchise Tax Board.
21 (D) All elections made by the taxpayer pursuant to Section 42
22 of the Internal Revenue Code shall apply to this section.
23 (E) (i) The California Tax Credit Allocation Committee may
24 allocate a credit under this section in exchange for a credit allocated
25 pursuant to Section 42(d)(5)(B) of the Internal Revenue Code in
26 amounts up to 30 percent of the eligible basis of a building if the
27 credits allowed under Section 42 of the Internal Revenue Code are
28 reduced by an equivalent amount.
29 (ii) An equivalent amount shall be determined by the California
30 Tax Credit Allocation Committee based upon the relative amount
31 required to produce an equivalent state tax credit to the taxpayer.
32 (c) Section 42(b) of the Internal Revenue Code shall be modified
33 as follows:
34 (1) In the case of any qualified low-income building that is a
35 new building not federally subsidized, the term "applicable
36 percentage" means the following:
37 (A) For each of the first three years, the percentage prescribed
38 by the Secretary of the Treasury for new buildings that are not
39 federally subsidized for the taxable year, determined in accordance
40 with the requirements of Section 42(b)(1) of the Internal Revenue
P28 1 Code in lieu of the percentage prescribed in Section 42(b)(1)(A)
2 of the Internal Revenue Code.
3 (B) For the fourth year, the difference between 30 percent and
4 the sum of the applicable percentages for the first three years.
5 (2) In the case of any qualified low-income building that (i) is
6 a new building, (ii) not located in designated difficult development
7 areas (DDAs) or qualified census tracts (QCTs), as defined in
8 Section 42(d)(5)(8) of the Internal Revenue Code,
9 and (iii) is federally subsidized, the term "applicable percentage"
10 means for the first three years, 15 percent of the qualified basis of
11 the building, and for the fourth year, 5 percent of the qualified
12 basis of the building.
13 (3) In the case of any qualified low-income building that is (i)
14 an existing building, (ii) not located in designated difficult
15 development areas (DDAs) or qualified census tracts (QCTs), as
16 defined in Section 42(d)(5)(8) of the Internal Revenue
17 Code, and (iii) is federally subsidized, the term applicable
18 percentage means the following:
19 (A) For each of the first three years, the percentage prescribed
20 by the Secretary of the Treasury for new buildings that are federally
21 subsidized for the taxable year.
22 (B) For the fourth year, the difference between 13 percent and
23 the sum of the applicable percentages for the first three years.
24 (4) In the case of any qualified low-income building that is (i)
25 a new or an existing building, (ii) located in designated difficult
26 development areas (DDAs) or qualified census tracts (QCTs) as
27 defined in Section 42(d)(5)(B) of the Internal Revenue Code, and
28 (iii) federally subsidized, the California Tax Credit Allocation
29 Committee shall determine the amount of credit to be allocated
30 under subparagraph (E) of paragraph (2) of subdivision (b) required
31 to produce an equivalent state tax credit to the taxpayer, as
32 produced in paragraph (2), taking into account the basis boost
33 provided under Section 42(d)(5)(B) of the Internal Revenue Code.
34 (5) In the case of any qualified low-income building that meets
35 all of the requirements of subparagraphs (A) through (D), inclusive,
36 the term "applicable percentage" means 30 percent for each of the
37 first three years and 5 percent for the fourth year.
38 (A) The qualified low-income building is at least 15 years old.
P29 1 (B) The qualified low-income building is a SRO, special needs
2 housing, is in a rural area, or serves households with very
3 low-income or extremely low-income residents.
4 (C) The qualified low-income building is serving households
5 of very low-income or extremely low-income provided that the
6 average income at time admission is not more than 45 percent of
7 the median gross income, as determined under Section 42 of the
8 Internal Revenue Code, adjusted by household size.
9 (D) The qualified low-income building would have insufficient
10 credits under paragraphs (1) and (2) to complete substantial
11 rehabilitation due to a low appraised value.
12 (d) The term "qualified low-income housing project" as defined
13 in Section 42(c)(2) of the Internal Revenue Code is modified by
14 adding the following requirements:
15 (1) The taxpayer shall be entitled to receive a cash distribution
16 from the operations of the project, after funding required reserves,
17 that at the election of the taxpayer, is equal to:
18 (A) An amount not to exceed 8 percent of the lesser of:
19 (i) The owner equity, that shall include the amount of the capital
20 contributions actually paid to the housing sponsor and shall not
21 include any amounts until they are paid on an investor note.
22 (ii) Twenty percent of the adjusted basis of the building as of
23 the close of the first taxable year of the credit period.
24 (B) The amount of the cashflow from those units in the building
25 that are not low-income units. For purposes of computing cashflow
26 under this subparagraph, operating costs shall be allocated to the
27 low-income units using the "floor space fraction," as defined in
28 Section 42 of the Internal Revenue Code.
29 (C) Any amount allowed to be distributed under subparagraph
30 (A) that is not available for distribution during the first five years
31 of the compliance period may be accumulated and distributed any
32 time during the first 15 years of the compliance period but not
33 thereafter.
34 (2) The limitation on return shall apply in the aggregate to the
35 partners if the housing sponsor is a partnership and in the aggregate
36 to the shareholders if the housing sponsor is an "S" corporation.
37 (3) The housing sponsor shall apply any cash available for
38 distribution in excess of the amount eligible to be distributed under
39 paragraph (1) to reduce the rent on rent -restricted units or to
P30 1 increase the number of rent -restricted units subject to the tests of
2 Section 42(8)(1) of the Internal Revenue Code.
3 (e) The provisions of Section 42(f) of the Internal Revenue Code
4 shall be modified as follows:
5 (1) The term "credit period" as defined in Section 42(f)(1) of
6 the Internal Revenue Code is modified by substituting "four taxable
7 years" for "10 taxable years."
8 (2) The special rule for the first taxable year of the credit period
9 under Section 42(f)(2) of the Internal Revenue Code shall not apply
10 to the tax credit under this section.
11 (3) Section 42(f)(3) of the Internal Revenue Code is modified
12 to read:
13 If, as of the close of any taxable year in the compliance period,
14 after the first year of the credit period, the qualified basis of any
15 building exceeds the qualified basis of that building as of the close
16 of the first year of the credit period, the housing sponsor, to the
17 extent of its tax credit allocation, shall be eligible for a credit on
18 the excess in an amount equal to the applicable percentage
19 determined pursuant to subdivision (c) for the four-year period
20 beginning with the later of the taxable years in which the increase
21 in qualified basis occurs.
22 (f) The provisions of Section 42(h) of the Internal Revenue
23 Code shall be modified as follows:
24 (1) Section 42(h)(2) of the Internal Revenue Code shall not be
25 applicable and instead the following provisions shall be applicable:
26 The total amount for the four-year credit period of the housing
27 credit dollars allocated in a calendar year to any building shall
28 reduce the aggregate housing credit dollar amount of the California
29 Tax Credit Allocation Committee for the calendar year in which
30 the allocation is made.
31 (2) Paragraphs (3), (4), (5), (6)(E)(i)(II), (6)(F), (6)(G), (6)(I),
32 (7), and (8) of Section 42(h) of the Internal Revenue Code shall
33 not be applicable.
34 (g) The aggregate housing credit dollar amount that may be
35 allocated annually by the California Tax Credit Allocation
36 Committee pursuant to this section, Section 12206, and Section
37 17058 shall be an amount equal to the sum of all the following:
P31
P32
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39
40
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2
3
4
5
6
7
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13
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(1) (A) Seventy million dollars ($70,000,000) for the 2001
calendar year, and, for the 2002 calendar year and each calendar
year thereafter, seventy million dollars ($70,000,000) increased
by the percentage, if any, by which the Consumer Price Index for
the preceding calendar year exceeds the Consumer Price Index for
the 2001 calendar year. For the purposes of this paragraph, the
term "Consumer Price Index" means the last Consumer Price Index
for All Urban Consumers published by the federal Department of
Labor.
(B) An additional three hundred million dollars ($300,000,000)
for the 2015 calendar year, and, for the 2016 calendar year and
each calendar year thereafter, three hundred million dollars
($300,000,000) increased by the percentage, if any, by which the
Consumer Price Index for the preceding calendar year exceeds the
Consumer Price Index for the 2015 calendar year. For the purposes
of this paragraph, the term "Consumer Price Index" means the last
Consumer Price Index for All Urban Consumers published by the
federal Department of Labor. A housing sponsor receiving an
allocation under paragraph (1) of subdivision (c) shall not be
eligible for receipt of the housing credit allocated from the
increased amount under this subparagraph. A housing sponsor
receiving an allocation under paragraph (1) of subdivision (c) shall
remain eligible for receipt of the housing credit allocated from the
credit ceiling amount under subparagraph (A).
(2) The unused housing credit ceiling, if any, for the preceding
calendar years.
(3) The amount of housing credit ceiling returned in the calendar
year. For purposes of this paragraph, the amount of housing credit
dollar amount returned in the calendar year equals the housing
credit dollar amount previously allocated to any project that does
not become a qualified low-income housing project within the
period required by this section or to any project with respect to
which an allocation is canceled by mutual consent of the California
Tax Credit Allocation Committee and the allocation recipient.
(4) Five hundred thousand dollars ($500,000) per calendar year
for projects to provide farmworker housing, as defined in
subdivision (h) of Section 50199.7 of the Health and Safety Code.
(5) The amount of any unallocated or returned credits under
former Sections 17053.14, 23608.2, and 23608.3, as those sections
read prior to January 1, 2009, until fully exhausted for projects to
provide farmworker housing, as defined in subdivision (h) of
Section 50199.7 of the Health and Safety Code.
(h) The term "compliance period" as defined in Section 42(i)(1)
of the Internal Revenue Code is modified to mean, with respect to
any building, the period of 30 consecutive taxable years beginning
with the first taxable year of the credit period with respect thereto.
(i) Section 42(j) of the Internal Revenue Code shall not be
applicable and the following shall be substituted in its place:
The requirements of this section shall be set forth in a regulatory
agreement between the California Tax Credit Allocation Committee
and the housing sponsor, and the regulatory agreement shall be
subordinated, when required, to any lien or encumbrance of any
banks or other institutional lenders to the project. The regulatory
agreement entered into pursuant to subdivision (f) of Section
50199.14 of the Health and Safety Code shall apply, provided that
the agreement includes all of the following provisions:
15 (1) A term not less than the compliance period.
16 (2) A requirement that the agreement be recorded in the official
17 records of the county in which the qualified low-income housing
18 project is located.
19 (3) A provision stating which state and local agencies can
20 enforce the regulatory agreement in the event the housing sponsor
21 fails to satisfy any of the requirements of this section.
22 (4) A provision that the regulatory agreement shall be deemed
23 a contract enforceable by tenants as third -party beneficiaries
24 thereto, and that allows individuals, whether prospective, present,
25 or former occupants of the building, who meet the income
26 limitation applicable to the building, the right to enforce the
27 regulatory agreement in any state court.
28 (5) A provision incorporating the requirements of Section 42
29 of the Internal Revenue Code as modified by this section.
30 (6) A requirement that the housing sponsor notify the California
31 Tax Credit Allocation Committee or its designee if there is a
32 determination by the Internal Revenue Service that the project is
33 not in compliance with Section 42(g) of the Internal Revenue Code.
34 (7) A requirement that the housing sponsor, as security for the
35 performance of the housing sponsor's obligations under the
36 regulatory agreement, assign the housing sponsor's interest in rents
37 that it receives from the project, provided that until there is a
38 default under the regulatory agreement, the housing sponsor is
39 entitled to collect and retain the rents.
P33 1 (8) The remedies available in the event of a default under the
2 regulatory agreement that is not cured within a reasonable cure
3 period include, but are not limited to, allowing any of the parties
4 designated to enforce the regulatory agreement to collect all rents
5 with respect to the project; taking possession of the project and
6 operating the project in accordance with the regulatory agreement
7 until the enforcer determines the housing sponsor is in a position
8 to operate the project in accordance with the regulatory agreement;
9 applying to any court for specific performance; securing the
10 appointment of a receiver to operate the project; or any other relief
11 as may be appropriate.
12 (j) (1) The committee shall allocate the housing credit on a
13 regular basis consisting of two or more periods in each calendar
14 year during which applications may be filed and considered. The
15 committee shall establish application filing deadlines, the maximum
16 percentage of federal and state low-income housing tax credit
17 ceiling that may be allocated by the committee in that period, and
18 the approximate date on which allocations shall be made. If the
19 enactment of federal or state law, the adoption of rules or
20 regulations, or other similar events prevent the use of two allocation
21 periods, the committee may reduce the number of periods and
22 adjust the filing deadlines, maximum percentage of credit allocated,
23 and allocation dates.
24 (2) The committee shall adopt a qualified allocation plan, as
25 provided in Section 42(m)(1) of the Internal Revenue Code. In
26 adopting this plan, the committee shall comply with the provisions
27 of Sections 42(m)(1)(B) and 42(m)(1)(C) of the Internal Revenue
28 Code, respectively.
29 (3) Notwithstanding Section 42(m) of the Internal Revenue
30 Code the California Tax Credit Allocation Committee shall allocate
31 housing credits in accordance with the qualified allocation plan
32 and regulations, which shall include the following provisions:
33 (A) All housing sponsors, as defined by paragraph (3) of
34 subdivision (a), shall demonstrate at the time the application is
35 filed with the committee that the project meets the following
36 threshold requirements:
37 (i) The housing sponsor shall demonstrate there is a need for
38 low-income housing in the community or region for which it is
39 proposed.
P34 1 (ii) The project's proposed financing, including tax credit
2 proceeds, shall be sufficient to complete the project and shall be
3 adequate to operate the project for the extended use period.
4 (iii) The project shall have enforceable financing commitments,
5 either construction or permanent financing, for at least 50 percent
6 of the total estimated financing of the project.
7 (iv) The housing sponsor shall have and maintain control of the
8 site for the project.
9 (v) The housing sponsor shall demonstrate that the project
10 complies with all applicable local land use and zoning ordinances.
11 (vi) The housing sponsor shall demonstrate that the project
12 development team has the experience and the financial capacity
13 to ensure project completion and operation for the extended use
14 period.
15 (vii) The housing sponsor shall demonstrate the amount of tax
16 credit that is necessary for the financial feasibility of the project
17 and its viability as a qualified low-income housing project
18 throughout the extended use period, taking into account operating
19 expenses, a supportable debt service, reserves, funds set aside for
20 rental subsidies and required equity, and a development fee that
21 does not exceed a specified percentage of the eligible basis of the
22 project prior to inclusion of the development fee in the eligible
23 basis, as determined by the committee.
24 (B) The committee shall give a preference to those projects
25 satisfying all of the threshold requirements of subparagraph (A)
26 if both of the following apply:
27 (i) The project serves the lowest income tenants at rents
28 affordable to those tenants.
29 (ii) The project is obligated to serve qualified tenants for the
30 longest period.
31 (C) In addition to the provisions of subparagraphs (A) and (B),
32 the committee shall use the following criteria in allocating housing
33 credits:
34 (i) Projects serving large families in which a substantial number,
35 as defined by the committee, of all residential units are low-income
36 units with three and more bedrooms.
37 (ii) Projects providing single -room occupancy units serving
38 very low income tenants.
39 (iii) (I) Existing projects that are "at risk of conversion."
P35 1 (II) For purposes of this section, the term "at risk of conversion,"
2 with respect to an existing property means a property that satisfies
3 all of the following criteria:
4 (ia) The property is a multifamily rental housing development
5 in which at least 50 percent of the units receive governmental
6 assistance pursuant to any of the following:
7 (Ia) New construction, substantial rehabilitation, moderate
8 rehabilitation, property disposition, and loan management set-aside
9 programs, or any other program providing project -based assistance
10 pursuant to Section 8 of the United States Housing Act of 1937,
11 Section 1437f of Title 42 of the United States Code, as amended.
12 (Ib) The Below -Market -Interest -Rate Program pursuant to
13 Section 221(d)(3) of the National Housing Act, Sections
14 17151(d)(3) and (5) of Title 12 of the United States Code.
15 (Ic) Section 236 of the National Housing Act, Section 1715z-1
16 of Title 12 of the United States Code.
17 (Id) Programs for rent supplement assistance pursuant to Section
18 18 101 of the Housing and Urban Development Act of 1965,
19 Section 1701s of Title 12 of the United States Code, as amended.
20 (Ie) Programs pursuant to Section 515 of the Housing Act of
21 1949, Section 1485 of Title 42 of the United States Code, as
22 amended.
23 (If) The low-income housing credit program set forth in Section
24 42 of the Internal Revenue Code.
25 (ib) The restrictions on rent and income levels will terminate
26 or the federal insured mortgage on the property is eligible for
27 prepayment any time within five years before or after the date of
28 application to the California Tax Credit Allocation Committee.
29 (ic) The entity acquiring the property enters into a regulatory
30 agreement that requires the property to be operated in accordance
31 with the requirements of this section for a period equal to the
32 greater of 55 years or the life of the property.
33 (id) The property satisfies the requirements of Section 42(e) of
34 the Internal Revenue Code, regarding rehabilitation expenditures
35 except that the provisions of Section 42(e)(3)(A)(ii)(I) shall not
36 apply.
37 (iv) Projects for which a public agency provides direct or indirect
38 long-term financial support for at least 15 percent of the total
39 project development costs or projects for which the owner's equity
P36 1 constitutes at least 30 percent of the total project development
2 costs.
3 (v) Projects that provide tenant amenities not generally available
4 to residents of low-income housing projects.
5 (4) For purposes of allocating credits pursuant to this section,
6 the committee shall not give preference to any project by virtue
7 of the date of submission of its application except to break a tie
8 when two or more of the projects have an equal rating.
9 (5) Not less than 20 percent of the low-income housing tax
10 credits available annually under this section, Section 12206, and
11 Section 17058 shall be set aside for allocation to rural areas as
12 defined in Section 50199.21 of the Health and Safety Code. Any
13 amount of credit set aside for rural areas remaining on or after
14 October 31 of any calendar year shall be available for allocation
15 to any eligible project. No amount of credit set aside for rural areas
16 shall be considered available for any eligible project so long as
17 there are eligible rural applications pending on October 31.
18 (k) Section 42(/) of the Internal Revenue Code shall be modified
19 as follows:
20 The term "secretary" shall be replaced by the term "California
21 Franchise Tax Board."
22 (/) In the case where the credit allowed under this section
23 exceeds the "tax," the excess may be carried over to reduce the
24 "tax" in the following year, and succeeding taxable years if
25 necessary, until the credit has been exhausted.
26 (m) A project that received an allocation of a 1989 federal
27 housing credit dollar amount shall be eligible to receive an
28 allocation of a 1990 state housing credit dollar amount, subject to
29 all of the following conditions:
30 (1) The project was not placed in service prior to 1990.
31 (2) To the extent the amendments made to this section by the
32 Statutes of 1990 conflict with any provisions existing in this section
33 prior to those amendments, the prior provisions of law shall prevail.
34 (3) Notwithstanding paragraph (2), a project applying for an
35 allocation under this subdivision shall be subject to the
36 requirements of paragraph (3) of subdivision (j).
37 (n) The credit period with respect to an allocation of credit in
38 1989 by the California Tax Credit Allocation Committee of which
39 any amount is attributable to unallocated credit from 1987 or 1988
40 shall not begin until after December 31, 1989.
P37 1 (o) The provisions of Section 11407(a) of Public Law 101-508,
2 relating to the effective date of the extension of the low-income
3 housing credit, shall apply to calendar years after 1989.
4 (p) The provisions of Section 11407(c) of Public Law 101-508,
5 relating to election to accelerate credit, shall not apply.
6 (q) (1) A corporation may elect to assign any portion of any
7 credit allowed under this section to one or more affiliated
8 corporations for each taxable year in which the credit is allowed.
9 For purposes of this subdivision, "affiliated corporation" has the
10 meaning provided in subdivision (b) of Section 25110, as that
11 section was amended by Chapter 881 of the Statutes of 1993, as
12 of the last day of the taxable year in which the credit is allowed,
13 except that "100 percent" is substituted for "more than 50 percent"
14 wherever it appears in the section, as that section was amended by
15 Chapter 881 of the Statutes of 1993, and "voting common stock"
16 is substituted for "voting stock" wherever it appears in the section,
17 as that section was amended by Chapter 881 of the Statutes of
18 1993.
19 (2) The election provided in paragraph (1):
20 (A) May be based on any method selected by the corporation
21 that originally receives the credit.
22 (B) Shall be irrevocable for the taxable year the credit is allowed,
23 once made.
24 (C) May be changed for any subsequent taxable year if the
25 election to make the assignment is expressly shown on each of the
26 returns of the affiliated corporations that assign and receive the
27 credits.
28 (r) Any unused credit may continue to be carried forward, as
29 provided in subdivision (/), until the credit has been exhausted.
30 (s) This section shall remain in effect on and after December 1,
31 1990, for as long as Section 42 of the Internal Revenue Code,
32 relating to low-income housing credit, remains in effect.
33 (t) The amendments to this section made by Chapter 1222 of
34 the Statutes of 1993 shall apply only to taxable years beginning
35 on or after January 1, 1994, except that paragraph (1) of subdivision
36 (q), as amended, shall apply to taxable years beginning on or after
37 January 1, 1993.
P38 1 SEC. 4.
This act provides for a tax levy within the meaning of
2 Article IV of the Constitution and shall go into immediate effect.
CITY COUNCIL
BOB JOHNSON, Mayor
MARK CHANDLER,
Mayor Pro Tempore
DOUG KUEHNE
JOANNE MOUNCE
ALAN NAKANISHI
CITY OF L OD I
CITY HALL, 221 WEST PINE STREET
P.O. BOX 3006
LODI, CALIFORNIA 95241-1910
(209) 333-6702 / FAX (209) 333-6807
www.lodi.gov cityclerk(a)lodi.gov
May 7, 2015
The Honorable Toni G. Atkins
Speaker, California State Assembly
State Capitol, Room 219
Sacramento, CA 95814
FAX: 916-319-2178
RE: AB 1335 (Atkins) Building Homes and Jobs Act
NOTICE OF SUPPORT
STEPHEN SCHWABAUER
City Manager
JENNIFER M. FERRAIOLO
City Clerk
JANICE D. MAGDICH
City Attorney
On behalf of the City of Lodi, I am pleased to convey our support for your AB 1335. This
bill would generate up to $700 million per year for affordable rental or ownership housing,
supportive housing, emergency shelters, transitional housing, and other housing needs
via a $75 recordation fee on real estate transactions with the exception of home sales.
Our city is eager to provide affordable housing but we lack the resources to do so.
AB 1335 would provide an ongoing, permanent state source of funding which would allow
the state to fund existing programs at dependable levels. This is a more reliable and
efficient mechanism than occasional housing bonds. Further, the Building Homes and
Jobs Act will help to leverage additional federal, local, and private investment.
We appreciate your leadership on this critical issue.
Sincerely,
Bob Johnson
Mayor, City of Lodi
cc: Senator Cathleen Galgiani, Fax: 916-651-4905
Assemblymember Jim Cooper, Fax: 916-262-0995
Assemblymember Ed Chau, Chair, Assembly Housing and Community Development
Committee, FAX: 916-319-2149
Stephen Qualls, Central Valley Regional Public Affairs Manager, League of California Cities
CITY COUNCIL
BOB JOHNSON, Mayor
MARK CHANDLER,
Mayor Pro Tempore
DOUG KUEHNE
JOANNE MOUNCE
ALAN NAKANISHI
CITY OF L OD I
CITY HALL, 221 WEST PINE STREET
P.O. BOX 3006
LODI, CALIFORNIA 95241-1910
(209) 333-6702 / FAX (209) 333-6807
www.lodi.gov cityclerk(a)lodi.gov
May 7, 2015
The Honorable David Chiu
California State Assembly
State Capitol, Room 2196
Sacramento, CA 95814
FAX: 916-319-2117
RE: AB 35 (Chiu and Atkins). Low-income Housing Tax credits
NOTICE OF SUPPORT
STEPHEN SCHWABAUER
City Manager
JENNIFER M. FERRAIOLO
City Clerk
JANICE D. MAGDICH
City Attorney
On behalf of the City of Lodi, I write to inform you of our support for AB 35, which
would increase the state's Low Income Housing Tax Credit by $300 million to build
and rehabilitate affordable housing.
We are eager to provide affordable housing but with the loss of redevelopment
housing funds we lack the resources to do so. Increasing the available tax credits for
low-income housing will leverage additional federal tax credits and tax exempt bond
authority. Building more affordable housing will not only help to mitigate our low
income housing crisis, but will increase construction jobs and tax revenues.
Thank you for your leadership on this important issue.
Sincerely,
Bob Johnson
Mayor, City of Lodi
cc: Senator Cathleen Galgiani, Fax: 916-651-4905
Assemblymember Jim Cooper, Fax: 916-262-0995
Assemblymember Ed Chau, Chair, Assembly Housing and Community Development
Committee, FAX: 916-319-2149
Stephen Qualls, Central Valley Regional Public Affairs Manager, League of California Cities
FACSIMILE COVER SHEET
D CITY CLERK'S OFFICE
221 WEST PINE STREET - P.O. BOX 3006
LODI, CALIFORNIA 95241-1910
PHONE (209) 333-6702 FAX (209) 333-6807
citycirk _.lodi.gov or pfarris@lodi.gov
DATE: May 7, 2015
FROM: Pamela M. Farris
Deputy City Clerk
TO: Assemblymember David Chiu, 916-319-2117
Senator Cathleen Galgiani, 916-651-4905
Assemblymember Jim Cooper, 916-262-0995 31q - Ltoq
Assemblymember Ed Chau, 916-319-2149
Stephen Qualls, 209-883-0653
COMMENTS: Attached please find the Notice of Support for AB 35 (Chiu
and Atkins) — Low -Income Housing Tax Credits
THIS TRANSMITTAL CONTAINS 2 PAGE(S), INCLUDING THIS COVER SHEET.
forms\aafaxjen.doc
CITY COUNCIL
BOB JOHNSON, Mayor
MARK CHANDLER,
Mayor Pro Tempore
DOUG KUEHNE
JOANNE MOUNCE
ALAN NAKANISHI
CITY OF LODI
CITY HALL, 221 WEST PINE STREET
P.O. BOX 3006
LODI, CALIFORNIA 95241-1910
(209) 333-6702 / FAX (209) 333-6807
www.lodi.gov ciyuli rk._�!od: gqv
May 7, 2015
The Honorable David Chiu
California State Assembly
State Capitol, Room 2196
Sacramento, CA 95814
FAX: 916-319-2117
RE: AB 35 (Chiu and Atkins). Low-income Housing Tax credits
NOTICE OF SUPPORT
STEPHEN SCHWABAUER
City Manager
JENNIFER M. FERRAIOLO
City Clerk
JANICE D. MAGDICH
City Attorney
On behalf of the City of Lodi, I write to inform you of our support for AB 35, which
would increase the state's Low Income Housing Tax Credit by $300 million to build
and rehabilitate affordable housing.
We are eager to provide affordable housing but with the loss of redevelopment
housing funds we lack the resources to do so. Increasing the available tax credits for
low-income housing will leverage additional federal tax credits and tax exempt bond
authority. Building more affordable housing will not only help to mitigate our low
income housing crisis, but will increase construction jobs and tax revenues.
Thank you for your leadership on this important issue.
i rely,
bJohnson
ayor, City of Lodi
cc: Senator Cathleen Galgiani, Fax: 916-651-4905
Assemblymember Jim Cooper, Fax: 916-262-0995
Assemblymember Ed Chau, Chair, Assembly Housing and Community Development
Committee, FAX: 916-319-2149
Stephen Qualls, Central Valley Regional Public Affairs Manager, League of California Cities
FACSIMILE COVER SKEET
CITY CLERK'S OFFICE
221 WEST PINE STREET - P.O. BOX 3006
LODI, CALIFORNIA 95241-1910
PHONE (209) 333-6702 FAX (209) 333-6807
ci[yc1rk 1odi. n is_1.1tnJ�
DATE: May 7, 2015
FROM: Pamela M. Farris
Deputy City Clerk
TO: Assemblymember Toni G. Atkins, 916-319-2178
Senator Cathleen Galgiani, 916-651-4905
Assemblymember Jim Cooper, 916-262-GR95- 3 Irl ZI C)q
Assemblymember Ed Chau, 916-319-2149
Stephen Qualls, 209-883-0653
COMMENTS: Attached please find the Notice of Support for AB 1335
(Atkins) — Building Homes and Jobs Act
THIS TRANSMITTAL CONTAINS 2 PAGE(S), INCLUDING THIS COVER SHEET.
forms\aafaxjen.doc
CITY COUNCIL
BOB JOHNSON, Mayor
MARK CHANDLER,
Mayor Pro Tempore
DOUG KUEHNE
JOANNE MOUNCE
ALAN NAKANISHI
CITY OF LODI
CITY HALL, 221 WEST PINE STREET
P.O. BOX 3006
LODI, CALIFORNIA 95241-1910
(209) 333-6702 / FAX (209) 333-6807
www ladi. ❑v oityclerk&Ipdi_Qav
The Honorable Toni G. Atkins
Speaker, California State Assembly
State Capitol, Room 219
Sacramento, CA 95814
FAX: 916-319-2178
RE:
May 7, 2015
AB 1335 (Atkins) Building Homes and Jobs Act
NOTICE OF SUPPORT
STEPHEN SCHWABAUER
City Manager
JENNIFER M. FERRAIOLO
City Clerk
JANICE D. MAGDICH
City Attorney
On behalf of the City of Lodi, I am pleased to convey our support for your AB 1335. This
bill would generate up to $700 million per year for affordable rental or ownership housing,
supportive housing, emergency shelters, transitional housing, and other housing needs
via a $75 recordation fee on real estate transactions with the exception of home sales.
Our city is eager to provide affordable housing but we lack the resources to do so.
AB 1335 would provide an ongoing, permanent state source of funding which would allow
the state to fund existing programs at dependable levels. This is a more reliable and
efficient mechanism than occasional housing bonds. Further, the Building Homes and
Jobs Act will help to leverage additional federal, local, and private investment.
We appreciate your leadership on this critical issue.
ohnson
r, City of Lodi
cc: Senator Cathleen Galgiani, Fax: 916-651-4905
Assemblymember Jim Cooper, Fax: 916-262-0995
Assemblymember Ed Chau, Chair, Assembly Housing and Community Development
Committee, FAX: 916-319-2149
Stephen Qualls, Central Valley Regional Public Affairs Manager, League of California Cities