Bill Text: CA SB251 | 2009-2010 | Regular Session | Introduced
Bill Title: Housing and community development: housing omnibus bill.
Spectrum: Slight Partisan Bill (Democrat 7-4)
Status: (Passed) 2009-10-11 - Chaptered by Secretary of State. Chapter 632, Statutes of 2009. [SB251 Detail]
Download: California-2009-SB251-Introduced.html
BILL NUMBER: SB 251 INTRODUCED
BILL TEXT
INTRODUCED BY Committee on Transportation and Housing (Senators
Lowenthal (Chair), Ashburn, DeSaulnier, Harman, Hollingsworth, Huff,
Kehoe, Oropeza, Pavley, Simitian, and Wolk)
FEBRUARY 24, 2009
An act to amend Section 66412 of, and to repeal Section 65584.6
of, the Government Code, to amend Section 18031.7 of the Health and
Safety Code, and to amend Sections 3692.4, 12206, 17058, and 23610.5
of the Revenue and Taxation Code, relating to housing.
LEGISLATIVE COUNSEL'S DIGEST
SB 251, as introduced, Committee on Transportation and Housing.
Housing and Community Development: housing omnibus bill.
(1) Existing law exempts from the requirements of the Subdivision
Map Act specified types of property, including the conversion of a
community apartment project, and the conversion of a stock
cooperative, unless a parcel or final map was approved by the
legislative body of a local agency, if specified requirements are
met.
This bill would modify the requirements for an exemption relating
to the conversion of a community apartment project and stock
cooperative.
(2) Existing law requires all fuel-gas-burning water heater
appliances in new manufactured homes or new multifamily manufactured
homes installed in the state to be seismically braced, anchored, or
strapped. In the event of a sale of a home, the homeowner or
contractor responsible for the installation of the home is required
to ensure all fuel-gas-burning water heater appliances are
seismically braced, anchored, or strapped, consistent with existing
law. The requirement is satisfied when the homeowner or responsible
contractor both completes that work and signs a declaration stating
each fuel-gas-burning water heater is secured.
This bill would instead provide that the requirement is satisfied
when the homeowner or responsible contractor both determines that
work is complete and signs the declaration.
(3) This bill would delete obsolete provisions, correct erroneous
cross-references, and make various other, technical changes in
existing law relating to housing.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 65584.6 of the Government Code is repealed.
65584.6. (a) The County of Napa may, during its current housing
element planning period, identified in Section 65588, meet up to 15
percent of its existing share of the regional housing need for lower
income households, as defined in Section 65584, by committing funds
for the purpose of constructing affordable housing units, and
constructing those units in one or more cities within the county,
only after all of the following conditions are met:
(1) An agreement has been executed between the county and the
receiving city or cities, following a public hearing held by the
county and the receiving city or cities to solicit public comments on
the draft agreement. The agreement shall contain information
sufficient to demonstrate that the county and city or cities have
complied with the requirements of this section and shall also include
the following:
(A) A plan and schedule for timely construction of dwelling units.
(B) Site identification by street address for the units to be
developed.
(C) A statement either that the sites upon which the units will be
developed were identified in the receiving city's housing element as
potential sites for the development of housing for lower-income
households, or that the units will be developed on previously
unidentified sites.
(D) The number and percentage of the county's lower-income housing
needs previously transferred, for the appropriate planning period,
pursuant to this section.
(2) The council of governments that assigned the county's share
receives and approves each proposed agreement to meet a portion of
the county's fair share housing allocation within one or more of the
cities within the county after taking into consideration the criteria
of subdivision (a) of Section 65584. If the council of governments
fails to take action to approve or disapprove an agreement between
the county and the receiving city or cities within 45 days following
the receipt of the agreement, the agreement shall be deemed approved.
(3) The city or cities in which the units are developed agree not
to count the units towards their share of the region's affordable
housing need.
(4) The county and the receiving city or cities, based on
substantial evidence on the record, make the following findings:
(A) Adequate sites with appropriate zoning exist in the receiving
city or cities to accommodate the units to be developed pursuant to
this section. The agreement shall demonstrate that the city or cities
have identified sufficient vacant or underutilized or vacant and
underutilized sites in their housing elements to meet their existing
share of regional housing need, as allocated by the council of
governments pursuant to subdivision (a) of Section 65584, in addition
to the sites needed to construct the units pursuant to this section.
(B) If needed, additional subsidy or financing for the
construction of the units is available.
(C) The receiving city or cities have housing elements that have
been found by the Department of Housing and Community Development to
be in compliance with this article.
(5) If the sites upon which units are to be developed pursuant to
this section were previously identified in the receiving city's
housing element as potential sites for the development of housing
sufficient to accommodate the receiving city's share of the lower
income household need identified in its housing element, then the
receiving city shall have amended its housing element to identify
replacement sites by street address for housing for lower-income
households. Additionally, the Department of Housing and Community
Development shall have received and reviewed the amendment and found
that the city's housing element continues to comply with this
article.
(6) The county and receiving city or cities shall have completed,
and provided to the department, the annual report required by
subdivision (b) of Section 65400.
(7) For a period of five years after a transfer occurs, the report
required by subdivision (b) of Section 65400 shall include
information on the status of transferred units, implementation of the
terms and conditions of the transfer agreement, and information on
any dwelling units actually constructed, including the number, type,
location, and affordability requirements.
(8) The receiving city demonstrates that it has met, in the
current or previous housing element cycle, at least 20 percent of its
share of the regional need for housing for very low-income
households allocated to the city pursuant to Section 65584.
(b) The credit that the county receives pursuant to this section
shall not exceed 40 percent of the number of units that are
affordable to lower income households and constructed and occupied
during the same housing element cycle in unincorporated areas of the
county. The county shall only receive the credit after the units have
been constructed and occupied. Within 60 days of issuance of a
certificate of occupancy for the units, the county shall inform the
council of governments and the department in writing that a
certificate of occupancy has been issued.
(c) Concurrent with the review by the council of governments
prescribed by this section, the Department of Housing and Community
Development shall evaluate the agreement to determine whether the
city or cities are in substantial compliance with this section. The
department shall report the results of its evaluation to the county
and city or cities for inclusion in their record of compliance with
this section.
(d) If at the end of the five-year period identified in
subdivision (c) of Section 65583, any percentage of the regional
share allocation has not been constructed as provided pursuant to
subdivision (a), or, after consultation with the department, the
council of governments determines that the requirements of paragraphs
(5) and (7) of subdivision (a) have not been substantially complied
with, the council of governments shall add the unbuilt units to Napa
County's regional share allocation for the planning period of the
next periodic update of the housing element.
(e) Napa County shall not meet a percentage of its share of the
regional share pursuant to subdivision (a) on or after June 30, 2007,
unless a later enacted statute, that is enacted before June 30,
2007, deletes or extends that date.
SEC. 2. Section 66412 of the Government Code is amended to read:
66412. This division shall be inapplicable to any of the
following:
(a) The financing or leasing of apartments, offices, stores, or
similar space within apartment buildings, industrial buildings,
commercial buildings, mobilehome parks, or trailer parks.
(b) Mineral, oil, or gas leases.
(c) Land dedicated for cemetery purposes under the Health and
Safety Code.
(d) A lot line adjustment between four or fewer existing adjoining
parcels, where the land taken from one parcel is added to an
adjoining parcel, and where a greater number of parcels than
originally existed is not thereby created, if the lot line adjustment
is approved by the local agency, or advisory agency. A local agency
or advisory agency shall limit its review and approval to a
determination of whether or not the parcels resulting from the lot
line adjustment will conform to the local general plan, any
applicable specific plan, any applicable coastal plan, and zoning and
building ordinances. An advisory agency or local agency shall not
impose conditions or exactions on its approval of a lot line
adjustment except to conform to the local general plan, any
applicable specific plan, any applicable coastal plan, and zoning and
building ordinances, to require the prepayment of real property
taxes prior to the approval of the lot line adjustment, or to
facilitate the relocation of existing utilities, infrastructure, or
easements. No tentative map, parcel map, or final map shall be
required as a condition to the approval of a lot line adjustment. The
lot line adjustment shall be reflected in a deed, which shall be
recorded. No record of survey shall be required for a lot line
adjustment unless required by Section 8762 of the Business and
Professions Code.
(e) Boundary line or exchange agreements to which the State Lands
Commission or a local agency holding a trust grant of tide and
submerged lands is a party.
(f) Any separate assessment under Section 2188.7 of the Revenue
and Taxation Code.
(g) Unless a parcel or final map was approved by the
legislative body of a local agency, the The
conversion of a community apartment project, as defined in Section
1351 of the Civil Code, to a condominium, as defined in Section 783
of the Civil Code, but only if all of the following requirements are
met:
(1) At least 75 percent of the units in the project were occupied
by record owners of the project on March 31, 1982.
(2) A final or parcel map of the project was properly recorded, if
the property was subdivided, as defined in Section 66424, after
January 1, 1964, with all of the conditions of that map remaining in
effect after the conversion.
(3) The local agency certifies that the above requirements were
satisfied if the local agency, by ordinance, provides for that
certification.
(4)
(1) The property was subdivided before January 1, 1982, as
evidenced by a recorded deed creating the community apartment
project.
(2) Subject to compliance with subdivision (e) of
Section 1351 of the Civil Code, all conveyances and other documents
necessary to effectuate the conversion shall be executed by the
required number of owners in the project as specified in the bylaws
or other organizational documents. If the bylaws or other
organizational documents do not expressly specify the number of
owners necessary to execute the conveyances and other documents, a
majority of owners in the project shall be required to execute the
conveyances or other documents. Conveyances and other documents
executed under the foregoing provisions shall be binding upon and
affect the interests of all parties in the project.
(3) If subdivision, as defined in Section 66424, of the property
occurred after January 1, 1964, both of the following requirements
are met:
(A) A final or parcel map of that subdivision was approved by the
local agency and recorded, with all of the conditions of that map
remaining in effect after the conversion.
(B) No more than 49 percent of the units in the project were owned
by any one person as defined in Section 17, including an
incorporator or director of the community apartment project, on
January 1, 1982.
(4) The local agency certifies that the above requirements were
satisfied if the local agency, by ordinance, provides for that
certification.
(h) Unless a parcel or final map was approved by the
legislative body of a local agency, the The
conversion of a stock cooperative, as defined in Section 1351 of the
Civil Code, to a condominium, as defined in Section 783 of the Civil
Code, but only if all of the following requirements are met:
(1) At least 51 percent of the units in the cooperative were
occupied by stockholders of the cooperative on January 1, 1981, or
individually owned by stockholders of the cooperative on January 1,
1981. As used in this paragraph, a cooperative unit is "individually
owned" if and only if the stockholder of that unit owns or partially
owns an interest in no more than one unit in the cooperative.
(2) No more than 25 percent of the shares of the cooperative were
owned by any one person, as defined in Section 17, including an
incorporator or director of the cooperative, on January 1, 1981.
(3)
(1) The property was subdivided before January 1, 1982, as
evidenced by a recorded deed creating the stock cooperative, an
assignment of lease, or issuance of shares to a stockholder.
(2) A person renting a unit in a cooperative shall be
entitled at the time of conversion to all tenant rights in state or
local law, including, but not limited to, rights respecting first
refusal, notice, and displacement and relocation benefits.
(4) The local agency certifies that the above requirements were
satisfied if the local agency, by ordinance, provides for that
certification.
(5)
(3) Subject to compliance with subdivision (e) of
Section 1351 of the Civil Code, all conveyances and other documents
necessary to effectuate the conversion shall be executed by the
required number of owners in the cooperative as specified in the
bylaws or other organizational documents. If the bylaws or other
organizational documents do not expressly specify the number of
owners necessary to execute the conveyances and other documents, a
majority of owners in the cooperative shall be required to execute
the conveyances or other documents. Conveyances and other documents
executed under the foregoing provisions shall be binding upon and
affect the interests of all parties in the cooperative.
(4) If subdivision, as defined in Section 66424, of the property
occurred after January 1, 1964, both of the following requirements
are met:
(A) A final or parcel map of that subdivision was approved by the
local agency and recorded, with all of the conditions of that map
remaining in effect after the conversion.
(B) No more than 49 percent of the units in the project were owned
by any one person as defined in Section 17, including an
incorporator or director of the community apartment project, on
January 1, 1982.
(5) The local agency certifies that the above requirements were
satisfied if the local agency, by ordinance, provides for that
certification.
(i) The leasing of, or the granting of an easement to, a parcel of
land, or any portion or portions thereof, in conjunction with the
financing, erection, and sale or lease of a windpowered electrical
generation device on the land, if the project is subject to
discretionary action by the advisory agency or legislative body.
(j) The leasing or licensing of a portion of a parcel, or the
granting of an easement, use permit, or similar right on a portion of
a parcel, to a telephone corporation as defined in Section 234 of
the Public Utilities Code, exclusively for the placement and
operation of cellular radio transmission facilities, including, but
not limited to, antennae support structures, microwave dishes,
structures to house cellular communications transmission equipment,
power sources, and other equipment incidental to the transmission of
cellular communications, if the project is subject to discretionary
action by the advisory agency or legislative body.
(k) Leases of agricultural land for agricultural purposes. As used
in this subdivision, "agricultural purposes" means the cultivation
of food or fiber, or the grazing or pasturing of livestock.
(l) The leasing of, or the granting of an easement to, a parcel of
land, or any portion or portions thereof, in conjunction with the
financing, erection, and sale or lease of a solar electrical
generation device on the land, if the project is subject to review
under other local agency ordinances regulating design and improvement
or, if the project is subject to other discretionary action by the
advisory agency or legislative body.
SEC. 3. Section 18031.7 of the Health and Safety Code is amended
to read:
18031.7. (a) Nothing in this part shall prohibit the replacement
of water heaters in manufactured homes or mobilehomes with
fuel-gas-burning water heaters not specifically listed for use in a
manufactured home or mobilehome or from having hot water supplied
from an approved source within the manufactured home or mobilehome,
or in the garage, in accordance with this part or Part 2.1
(commencing with Section 18200).
(b) Nothing in this part shall prohibit the replacement of
appliances for comfort heating in manufactured homes, mobilehomes, or
multifamily manufactured homes with fuel-gas appliances for comfort
heating not specifically listed for use in a manufactured home or
mobilehome within the manufactured home, mobilehome, or multifamily
manufactured home in accordance with this part, Part 2.1 (commencing
with Section 18200), or Part 2.3 (commencing with Section 18860).
(c) Replacement fuel-gas-burning water heaters shall be listed for
residential use and installed within the specifications of that
listing to include tiedown or bracing to prevent overturning.
(d) Replacement fuel-gas-burning water heaters installed in
accordance with subdivision (c) shall bear a label permanently
affixed in a visible location adjacent to the fuel gas inlet which
reads, as applicable:
WARNING
This appliance is approved only for use with
natural gas (NG).
OR
WARNING
This appliance is approved only for use with
liquefied petroleum
gas (LPG).
Lettering on the label shall be black on a red background and not
less than 1/4 inch in height except for the word "WARNING" which
shall be not less than 1/2 inch in height.
(e) (1) All fuel-gas-burning water heater appliances in new
manufactured homes or new multifamily manufactured homes installed in
the state shall be seismically braced, anchored, or strapped
pursuant to paragraph (3) and shall be completed before or at the
time of installation of the homes.
(2) Any replacement fuel-gas-burning water heater appliances
installed in existing mobilehomes, existing manufactured homes, or
existing multifamily manufactured homes that are offered for sale,
rent, or lease shall be seismically braced, anchored, or strapped
pursuant to paragraph (3).
(3) On or before July 1, 2009, the department shall promulgate
rules and regulations that include standards for water heater seismic
bracing, anchoring, or strapping. These standards shall be
substantially in accordance with either the guidelines developed
pursuant to Section 19215 or the California Plumbing Code (Part 5 of
Title 24 of the California Code of Regulations), and shall be
applicable statewide.
(4) The dealer, or manufacturer acting as a dealer, responsible,
as part of the purchase contract, for both the sale and installation
of any home subject to this subdivision shall ensure all water
heaters are seismically braced, anchored, or strapped in compliance
with this subdivision prior to completion of installation.
(5) In the event of a sale of a home, pursuant to either paragraph
(1) of subdivision (e) of Section 18035 or Section 18035.26, the
homeowner or contractor responsible for the installation of the home
shall ensure all fuel-gas-burning water heater appliances are
seismically braced, anchored, or strapped consistent with the
requirements of paragraph (3). This requirement shall be satisfied
when the homeowner or responsible contractor both completes
that work determines that work is complete and
signs a declaration stating each fuel-gas-burning water heater is
secured as required by this section on the date the declaration is
signed.
(f) All used mobilehomes, used manufactured homes, and used
multifamily manufactured homes that are sold shall, on or before the
date of transfer of title, have the fuel-gas-burning water heater
appliance or appliances seismically braced, anchored, or strapped
consistent with the requirements of paragraph (3) of subdivision (e).
This requirement shall be satisfied if, within 45 days prior to the
transfer of title, the transferor signs a declaration stating that
each water heater appliance in the used mobilehome, used manufactured
home, or used multifamily manufactured home is secured pursuant to
paragraph (3) of subdivision (e) on the date the declaration is
signed.
(g) For sales of manufactured homes or mobilehomes installed on
real property pursuant to subdivision (a) of Section 18551, as to
real estate agents licensed pursuant to Division 4 (commencing with
Section 10000) of the Business and Professions Code, the real estate
licensee duty provisions of Section 8897.5 of the Government Code
shall apply to this section.
SEC. 4. Section 3692.4 of the Revenue and Taxation Code is amended
to read:
3692.4. (a) Notwithstanding any other provision of law, any
county, city, city and county, or any nonprofit organization as
defined in Section 3772.5, may request the tax collector to bring to
the next scheduled public auction any residential real property that
meets all of the following requirements:
(1) The property taxes have been delinquent for at least three
years.
(2) The real property will serve the public benefit of providing
housing directly related to low-income persons.
(3) The real property is not occupied by the owner as his or her
principal place of residence.
(b) Every request submitted to the tax collector shall include the
following:
(1) A formal resolution of the governing board of the county,
city, city and county, or nonprofit organization, requesting the
accelerated auction of the real property and stating the public
benefit.
(2) A written plan for the development, rehabilitation, or
proposed use of the real property and how low-income persons will be
served.
(c) Upon receiving a request as provided by this section, the tax
collector shall include the real property in the next scheduled
public auction.
(d) (1) If the real property is acquired by a nonprofit
organization at auction, a deed restriction shall be placed on the
real property, requiring the real property to be used for low-income
housing for a period of at least 30 years.
(2) (A) In lieu of the 30-year restriction required by paragraph
(1), the deed may provide for equity sharing upon resale, if the real
property is a single-family home that will be sold by the nonprofit
organization to a low-income owner-occupant.
(B) To the extent not in conflict with another public funding
source or law, all of the following shall apply to an equity-sharing
agreement provided for by the deed:
(i) Upon resale by an owner-occupant of the home, the
owner-occupant of the home shall retain the market value of any
improvements, the downpayment, and his or her proportionate share of
appreciation. The nonprofit organization shall recapture any initial
subsidy and its proportionate share of appreciation, which shall then
be used for the purpose of providing financial assistance to
low-income homebuyers.
(ii) For purposes of this subdivision, the initial subsidy shall
be equal to the fair market value of the home at the time of initial
sale to the nonprofit organization low-income
owner-occupant minus the initial sale price to the low-income
owner-occupant, plus the amount of any downpayment assistance or
mortgage assistance. If upon resale by the owner-occupant the market
value is lower than the initial market value, then the value at the
time of the resale shall be used as the initial market value.
(iii) For purposes of this subdivision, the nonprofit organization'
s proportionate share of appreciation shall be equal to the ratio of
the initial subsidy to the fair market value of the home at the time
of initial sale.
(e) This section may not be construed to preclude the application,
to the real property or the current owners of that property, of any
other provision of law not in conflict with this section.
SEC. 5. Section 12206 of the Revenue and Taxation Code is amended
to read:
12206. (a) (1) There shall be allowed as a credit against the
"tax" (as defined by Section 12201) a state low-income housing tax
credit in an amount equal to the amount determined in subdivision
(c), computed in accordance with Section 42 of the Internal Revenue
Code, except as otherwise provided in this section.
(2) "Taxpayer," for purposes of this section, means the sole owner
in the case of a "C" corporation, the partners in the case of a
partnership, and the shareholders in the case of an "S" corporation.
(3) "Housing sponsor," for purposes of this section, means the
sole owner in the case of a "C" corporation, the partnership in the
case of a partnership, and the "S" corporation in the case of an "S"
corporation.
(b) (1) The amount of the credit allocated to any housing sponsor
shall be authorized by the California Tax Credit Allocation
Committee, or any successor thereof, based on a project's need for
the credit for economic feasibility in accordance with the
requirements of this section.
(A) Except for projects to provide farmworker housing, as defined
in subdivision (h) of Section 50199.7 of the Health and Safety Code,
that are allocated credits solely under the set-aside described in
subdivision (c) of Section 50199.20 of the Health and Safety Code,
the low-income housing project shall be located in California and
shall meet either of the following requirements:
(i) The project's housing sponsor shall have been allocated by the
California Tax Credit Allocation Committee a credit for federal
income tax purposes under Section 42 of the Internal Revenue Code.
(ii) It shall qualify for a credit under Section 42(h)(4)(B) of
the Internal Revenue Code.
(B) The California Tax Credit Allocation Committee shall not
require fees for the credit under this section in addition to those
fees required for applications for the tax credit pursuant to Section
42 of the Internal
Revenue Code. The committee may require a fee if the application for
the credit under this section is submitted in a calendar year after
the year the application is submitted for the federal tax credit.
(C) (i) For a project that receives a preliminary reservation of
the state low-income housing tax credit, allowed pursuant to
subdivision (a), on or after January 1, 2009, and before January 1,
2016, the credit shall be allocated to the partners of a partnership
owning the project in accordance with the partnership agreement,
regardless of how the federal low-income housing tax credit with
respect to the project is allocated to the partners, or whether the
allocation of the credit under the terms of the agreement has
substantial economic effect, within the meaning of Section 704(b) of
the Internal Revenue Code.
(ii) This subparagraph shall not apply to a project that receives
a preliminary reservation of state low-income housing tax credits
under the set-aside described in subdivision (c) of Section 50199.20
of the Health and Safety Code unless the project also
receives a preliminary reservation of federal low-income housing tax
credits.
(iii) This subparagraph shall cease to be operative with respect
to any project that receives a preliminary reservation of a credit on
or after January 1, 2016.
(2) (A) The California Tax Credit Allocation Committee shall
certify to the housing sponsor the amount of tax credit under this
section allocated to the housing sponsor for each credit period.
(B) In the case of a partnership or an "S" corporation, the
housing sponsor shall provide a copy of the California Tax Credit
Allocation Committee certification to the taxpayer.
(C) The taxpayer shall attach a copy of the certification to any
return upon which a tax credit is claimed under this section.
(D) In the case of a failure to attach a copy of the certification
for the year to the return in which a tax credit is claimed under
this section, no credit under this section shall be allowed for that
year until a copy of that certification is provided.
(E) All elections made by the taxpayer pursuant to Section 42 of
the Internal Revenue Code shall apply to this section.
(F) No credit shall be allocated under this section to buildings
located in a difficult development area or a qualified census tract
as defined in Section 42 of the Internal Revenue Code for which the
eligible basis of a new building or the rehabilitation expenditure of
an existing building is 130 percent of that amount pursuant to
Section 42(d)(5)(C) of the Internal Revenue Code, unless the
committee reduces the amount of federal credit, with the approval of
the applicant, so that the combined amount of federal and state
credit shall not exceed the total credit allowable pursuant to this
section and Section 42(b) of the Internal Revenue Code, computed
without regard to Section 42(d)(5)(C) of the Internal Revenue Code.
(c) Section 42(b) of the Internal Revenue Code shall be modified
as follows:
(1) In the case of any qualified low-income building that receives
an allocation after 1989 and is a new building not federally
subsidized, the term "applicable percentage" means the following:
(A) For each of the first three years, the percentage prescribed
by the Secretary of the Treasury for new buildings that are not
federally subsidized for the taxable year, determined in accordance
with the requirements of Section 42(b)(2) of the Internal Revenue
Code, in lieu of the percentage prescribed in Section 42(b)(1)(A) of
the Internal Revenue Code.
(B) For the fourth year, the difference between 30 percent and the
sum of the applicable percentages for the first three years.
(2) In the case of any qualified low-income building that receives
an allocation after 1989 and that is a new building that is
federally subsidized or that is an existing building that is "at risk
of conversion," the term "applicable percentage" means the
following:
(A) For each of the first three years, the percentage prescribed
by the Secretary of the Treasury for new buildings that are federally
subsidized for the taxable year.
(B) For the fourth year, the difference between 13 percent and the
sum of the applicable percentages for the first three years.
(3) For purposes of this section, the term "at risk of conversion,"
with respect to an existing property means a property that satisfies
all of the following criteria:
(A) The property is a multifamily rental housing development in
which at least 50 percent of the units receive governmental
assistance pursuant to any of the following:
(i) New construction, substantial rehabilitation, moderate
rehabilitation, property disposition, and loan management set-aside
programs, or any other program providing project-based assistance
pursuant to Section 8 of the United States Housing Act of 1937,
Section 1437f of Title 42 of the United States Code, as amended.
(ii) The Below-Market-Interest-Rate Program pursuant to Section
221(d)(3) of the National Housing Act, Sections 1715(d)(3) and (5) of
Title 12 of the United States Code.
(iii) Section 236 of the National Housing Act, Section 1715z-1 of
Title 12 of the United States Code.
(iv) Programs for rent supplement assistance pursuant to Section
101 of the Housing and Urban Development Act of 1965, Section 1701s
of Title 12 of the United States Code, as amended.
(v) Programs pursuant to Section 515 of the Housing Act of 1949,
Section 1485 of Title 42 of the United States Code, as amended.
(vi) The low-income housing credit program set forth in Section 42
of the Internal Revenue Code.
(B) The restrictions on rent and income levels will terminate or
the federal insured mortgage on the property is eligible for
prepayment any time within five years before or after the date of
application to the California Tax Credit Allocation Committee.
(C) The entity acquiring the property enters into a regulatory
agreement that requires the property to be operated in accordance
with the requirements of this section for a period equal to the
greater of 55 years or the life of the property.
(D) The property satisfies the requirements of Section 42(e) of
the Internal Revenue Code regarding rehabilitation expenditures,
except that the provisions of Section 42(e)(3)(A)(ii)(I) shall not
apply.
(d) The term "qualified low-income housing project" as defined in
Section 42(c)(2) of the Internal Revenue Code is modified by adding
the following requirements:
(1) The taxpayer shall be entitled to receive a cash distribution
from the operations of the project, after funding required reserves,
which, at the election of the taxpayer, is equal to:
(A) An amount not to exceed 8 percent of the lesser of:
(i) The owner equity which shall include the amount of the capital
contributions actually paid to the housing sponsor and shall not
include any amounts until they are paid on an investor note.
(ii) Twenty percent of the adjusted basis of the building as of
the close of the first taxable year of the credit period.
(B) The amount of the cashflow from those units in the building
that are not low-income units. For purposes of computing cashflow
under this subparagraph, operating costs shall be allocated to the
low-income units using the "floor space fraction," as defined in
Section 42 of the Internal Revenue Code.
(C) Any amount allowed to be distributed under subparagraph (A)
that is not available for distribution during the first five years of
the compliance period may accumulate and be distributed any time
during the first 15 years of the compliance period but not
thereafter.
(2) The limitation on return shall apply in the aggregate to the
partners if the housing sponsor is a partnership and in the aggregate
to the shareholders if the housing sponsor is an "S" corporation.
(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(g)(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 later of the taxable years 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) 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.
(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) (1) Section 42(j) of the Internal Revenue Code shall not be
applicable and the provisions in paragraph (2) shall be substituted
in its place.
(2) The requirements of this section shall be set forth in a
regulatory agreement between the California Tax Credit Allocation
Committee and the housing sponsor, which 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, providing the
agreement includes all of the following provisions:
(A) A term not less than the compliance period.
(B) A requirement that the agreement be filed in the official
records of the county in which the qualified low-income housing
project is located.
(C) A provision stating which state and local agencies can enforce
the regulatory agreement in the event the housing sponsor fails to
satisfy any of the requirements of this section.
(D) A provision that the regulatory agreement shall be deemed a
contract enforceable by tenants as third-party beneficiaries thereto
and which allows individuals, whether prospective, present, or former
occupants of the building, who meet the income limitation applicable
to the building, the right to enforce the regulatory agreement in
any state court.
(E) A provision incorporating the requirements of Section 42 of
the Internal Revenue Code as modified by this section.
(F) A requirement that the housing sponsor notify the California
Tax Credit Allocation Committee or its designee and the local agency
that can enforce the regulatory agreement 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.
(G) 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.
(H) 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 which 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 the 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.
(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
site for the project.
(v) The housing sponsor shall demonstrate that the project
complies with all applicable local land use and zoning ordinances.
(vi) The housing sponsor shall demonstrate that the project
development team has the experience and the financial capacity to
ensure project completion and operation for the extended use period.
(vii) The housing sponsor shall demonstrate the amount of tax
credit that is necessary for the financial feasibility of the project
and its viability as a qualified low-income housing project
throughout the extended use period, taking into account operating
expenses, a supportable debt service, reserves, funds set aside for
rental subsidies, and required equity, and a development fee that
does not exceed a specified percentage of the eligible basis of the
project prior to inclusion of the development fee in the eligible
basis, as determined by the committee.
(B) The committee shall give a preference to those projects
satisfying all of the threshold requirements of subparagraph (A) if
both of the following apply:
(i) The project serves the lowest income tenants at rents
affordable to those tenants.
(ii) The project is obligated to serve qualified tenants for the
longest period.
(C) In addition to the provisions of subparagraphs (A) and (B),
the committee shall use the following criteria in allocating housing
credits:
(i) Projects serving large families in which a substantial number,
as defined by the committee, of all residential units is comprised
of low-income units with three and more bedrooms.
(ii) Projects providing single room occupancy units serving very
low income tenants.
(iii) Existing projects that are "at risk of conversion," as
defined by paragraph (3) of subdivision (c).
(iv) Projects for which a public agency provides direct or
indirect long-term financial support for at least 15 percent of the
total project development costs or projects for which the owner's
equity constitutes at least 30 percent of the total project
development costs.
(v) Projects that provide tenant amenities not generally available
to residents of low-income housing projects.
(4) For purposes of allocating credits pursuant to this section,
the committee shall not give preference to any project by virtue of
the date of submission of its application except to break a tie when
two or more of the projects have an equal rating.
(k) Section 42(l) of the Internal Revenue Code shall be modified
as follows:
The term "secretary" shall be replaced by the term "California
Franchise Tax Board."
(l) In the case where the state credit allowed under this section
exceeds the "tax," the excess may be carried over to reduce the "tax"
in the following year, and succeeding years if necessary, until the
credit has been exhausted.
(m) The provisions of Section 11407(a) of Public Law 101-508,
relating to the effective date of the extension of the low-income
housing credit, shall apply to calendar years after 1993.
(n) The provisions of Section 11407(c) of Public Law 101-508,
relating to election to accelerate credit, shall not apply.
(o) This section shall remain in effect for as long as Section 42
of the Internal Revenue Code, relating to low-income housing credits,
remains in effect.
SEC. 6. Section 17058 of the Revenue and Taxation Code is amended
to read:
17058. (a) (1) There shall be allowed as a credit against the
amount of net tax (as defined in Section 17039) a state low-income
housing credit in an amount equal to the amount determined in
subdivision (c), computed in accordance with the provisions of
Section 42 of the Internal Revenue Code, except as otherwise provided
in this section.
(2) "Taxpayer" for purposes of this section means the sole owner
in the case of an individual, the partners in the case of a
partnership, and the shareholders in the case of an "S" corporation.
(3) "Housing sponsor" for purposes of this section means the sole
owner in the case of an individual, the partnership in the case of a
partnership, and the "S" corporation in the case of an "S"
corporation.
(b) (1) The amount of the credit allocated to any housing sponsor
shall be authorized by the California Tax Credit Allocation
Committee, or any successor thereof, based on a project's need for
the credit for economic feasibility in accordance with the
requirements of this section.
(A) The low-income housing project shall be located in California
and shall meet either of the following requirements:
(i) Except for projects to provide farmworker housing, as defined
in subdivision (h) of Section 50199.7 of the Health and Safety Code,
that are allocated credits solely under the set-aside described in
subdivision (c) of Section 50199.20 of the Health and Safety Code,
the project's housing sponsor shall have been allocated by the
California Tax Credit Allocation Committee a credit for federal
income tax purposes under Section 42 of the Internal Revenue Code.
(ii) It shall qualify for a credit under Section 42(h)(4)(B) of
the Internal Revenue Code.
(B) The California Tax Credit Allocation Committee shall not
require fees for the credit under this section in addition to those
fees required for applications for the tax credit pursuant to Section
42 of the Internal Revenue Code. The committee may require a fee if
the application for the credit under this section is submitted in a
calendar year after the year the application is submitted for the
federal tax credit.
(C) (i) For a project that receives a preliminary reservation of
the state low-income housing tax credit, allowed pursuant to
subdivision (a), on or after January 1, 2009, and before January 1,
2016, the credit shall be allocated to the partners of a partnership
owning the project in accordance with the partnership agreement,
regardless of how the federal low-income housing tax credit with
respect to the project is allocated to the partners, or whether the
allocation of the credit under the terms of the agreement has
substantial economic effect, within the meaning of Section 704(b) of
the Internal Revenue Code.
(ii) To the extent the allocation of the credit to a partner under
this section lacks substantial economic effect, any loss or
deduction otherwise allowable under this part that is attributable to
the sale or other disposition of that partner's partnership interest
made prior to the expiration of the federal credit shall not be
allowed in the taxable year in which the sale or other disposition
occurs, but shall instead be deferred until and treated as if it
occurred in the first taxable year immediately following the taxable
year in which the federal credit period expires for the project
described in clause (i).
(iii) This subparagraph shall not apply to a project that receives
a preliminary reservation of state low-income housing tax credits
under the set-aside described in subdivision (c) of Section 50199.20
of the Health and Safety Code unless the project also
receives a preliminary reservation of federal low-income housing tax
credits.
(iv) This subparagraph shall cease to be operative with respect to
any project that receives a preliminary reservation of a credit on
or after January 1, 2016.
(2) (A) The California Tax Credit Allocation Committee shall
certify to the housing sponsor the amount of tax credit under this
section allocated to the housing sponsor for each credit period.
(B) In the case of a partnership or an "S" corporation, the
housing sponsor shall provide a copy of the California Tax Credit
Allocation Committee certification to the taxpayer.
(C) The taxpayer shall, upon request, provide a copy of the
certification to the Franchise Tax Board.
(D) All elections made by the taxpayer pursuant to Section 42 of
the Internal Revenue Code shall apply to this section.
(E) For buildings located in designated difficult development
areas or qualified census tracts as defined in Section 42(d)(5)(C) of
the Internal Revenue Code, credits may be allocated under this
section in the amounts prescribed in subdivision (c), provided that
the amount of credit allocated under Section 42 of the Internal
Revenue Code is computed on 100 percent of the qualified basis of the
building.
(c) Section 42(b) of the Internal Revenue Code shall be modified
as follows:
(1) In the case of any qualified low-income building placed in
service by the housing sponsor during 1987, the term "applicable
percentage" means 9 percent for each of the first three years and 3
percent for the fourth year for new buildings (whether or not the
building is federally subsidized) and for existing buildings.
(2) In the case of any qualified low-income building that receives
an allocation after 1989 and is a new building not federally
subsidized, the term "applicable percentage" means the following:
(A) For each of the first three years, the percentage prescribed
by the Secretary of the Treasury for new buildings that are not
federally subsidized for the taxable year, determined in accordance
with the requirements of Section 42(b)(2) of the Internal Revenue
Code, in lieu of the percentage prescribed in Section 42(b)(1)(A) of
the Internal Revenue Code.
(B) For the fourth year, the difference between 30 percent and the
sum of the applicable percentages for the first three years.
(3) In the case of any qualified low-income building that receives
an allocation after 1989 and that is a new building that is
federally subsidized or that is an existing building that is "at risk
of conversion," the term "applicable percentage" means the
following:
(A) For each of the first three years, the percentage prescribed
by the Secretary of the Treasury for new buildings that are
federally subsidized for the taxable year.
(B) For the fourth year, the difference between 13 percent and the
sum of the applicable percentages for the first three years.
(4) For purposes of this section, the term "at risk of conversion,"
with respect to an existing property means a property that satisfies
all of the following criteria:
(A) The property is a multifamily rental housing development in
which at least 50 percent of the units receive governmental
assistance pursuant to any of the following:
(i) New construction, substantial rehabilitation, moderate
rehabilitation, property disposition, and loan management set-aside
programs, or any other program providing project-based assistance
pursuant to Section 8 of the United States Housing Act of 1937,
Section 1437f of Title 42 of the United States Code, as amended.
(ii) The Below-Market-Interest-Rate Program pursuant to Section
221(d)(3) of the National Housing Act, Sections 1715(d)(3) and (5) of
Title 12 of the United States Code.
(iii) Section 236 of the National Housing Act, Section 1715z-1 of
Title 12 of the United States Code.
(iv) Programs for rent supplement assistance pursuant to Section
101 of the Housing and Urban Development Act of 1965, Section 1701s
of Title 12 of the United States Code, as amended.
(v) Programs pursuant to Section 515 of the Housing Act of 1949,
Section 1485 of Title 42 of the United States Code, as amended.
(vi) The low-income housing credit program set forth in Section 42
of the Internal Revenue Code.
(B) The restrictions on rent and income levels will terminate or
the federal insured mortgage on the property is eligible for
prepayment any time within five years before or after the date of
application to the California Tax Credit Allocation Committee.
(C) The entity acquiring the property enters into a regulatory
agreement that requires the property to be operated in accordance
with the requirements of this section for a period equal to the
greater of 55 years or the life of the property.
(D) The property satisfies the requirements of Section 42(e) of
the Internal Revenue Code regarding rehabilitation expenditures,
except that the provisions of Section 42(e)(3)(A)(ii)(I) shall not
apply.
(d) The term "qualified low-income housing project" as defined in
Section 42(c)(2) of the Internal Revenue Code is modified by adding
the following requirements:
(1) The taxpayer shall be entitled to receive a cash distribution
from the operations of the project, after funding required reserves,
that, at the election of the taxpayer, is equal to:
(A) An amount not to exceed 8 percent of the lesser of:
(i) The owner equity that shall include the amount of the capital
contributions actually paid to the housing sponsor and shall not
include any amounts until they are paid on an investor note.
(ii) Twenty percent of the adjusted basis of the building as of
the close of the first taxable year of the credit period.
(B) The amount of the cashflow from those units in the building
that are not low-income units. For purposes of computing cashflow
under this subparagraph, operating costs shall be allocated to the
low-income units using the "floor space fraction," as defined in
Section 42 of the Internal Revenue Code.
(C) Any amount allowed to be distributed under subparagraph (A)
that is not available for distribution during the first five years of
the compliance period may be accumulated and distributed any time
during the first 15 years of the compliance period but not
thereafter.
(2) The limitation on return shall apply in the aggregate to the
partners if the housing sponsor is a partnership and in the aggregate
to the shareholders if the housing sponsor is an "S" corporation.
(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(g)(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 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 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 to this section.
(g) The aggregate housing credit dollar amount which may be
allocated annually by the California Tax Credit Allocation Committee
pursuant to this section, Section 12206, and Section 23610.5 shall be
an amount equal to the sum of all the following:
(1) 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.
(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 requirements of this section shall be
set forth in a regulatory agreement between the California Tax Credit
Allocation Committee and the housing sponsor, which 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, providing the
agreement includes all of the following provisions:
(1) A term not less than the compliance period.
(2) A requirement that the agreement be filed in the official
records of the county in which the qualified low-income housing
project is located.
(3) A provision stating which state and local agencies can enforce
the regulatory agreement in the event the housing sponsor fails to
satisfy any of the requirements of this section.
(4) A provision that the regulatory agreement shall be deemed a
contract enforceable by tenants as third-party beneficiaries thereto
and which allows individuals, whether prospective, present, or former
occupants of the building, who meet the income limitation applicable
to the building, the right to enforce the regulatory agreement in
any state court.
(5) A provision incorporating the requirements of Section 42 of
the Internal Revenue Code as modified by this section.
(6) A requirement that the housing sponsor notify the California
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 the 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.
(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
site for the project.
(v) The housing sponsor shall demonstrate that the project
complies with all applicable local land use and zoning ordinances.
(vi) The housing sponsor shall demonstrate that the project
development team has the experience and the financial capacity to
ensure project completion and operation for the extended use period.
(vii) The housing sponsor shall demonstrate the amount of tax
credit that is necessary for the financial feasibility of the project
and its viability as a qualified low-income housing project
throughout the extended use period, taking into account operating
expenses, a supportable debt service, reserves, funds set aside for
rental subsidies, and required equity, and a development fee that
does not exceed a specified percentage of the eligible basis of the
project prior to inclusion of the development fee in the eligible
basis, as determined by the committee.
(B) The committee shall give a preference to those projects
satisfying all of the threshold requirements of subparagraph (A) if
both of the following apply:
(i) The project serves the lowest income tenants at rents
affordable to those tenants.
(ii) The project is obligated to serve qualified tenants for the
longest period.
(C) In addition to the provisions of subparagraphs (A) and (B),
the committee shall use the following criteria in allocating housing
credits:
(i) Projects serving large families in which a substantial number,
as defined by the committee of all residential units is comprised of
low-income units with three and more bedrooms.
(ii) Projects providing single room occupancy units serving very
low income tenants.
(iii) Existing projects that are "at risk of conversion," as
defined by paragraph (4) of subdivision (c).
(iv) Projects for which a public agency provides direct or
indirect long-term financial support for at least 15 percent of the
total project development costs or projects for which the owner's
equity constitutes at least 30 percent of the total project
development costs.
(v) Projects that provide tenant amenities not generally available
to residents of low-income housing projects.
(4) For purposes of allocating credits pursuant to this section,
the committee shall not give preference to any project by virtue of
the date of submission of its application.
(k) Section 42() of the Internal Revenue Code shall be modified as
follows:
The term "secretary" shall be replaced by the term "California
Franchise Tax Board."
(l) In the case where the credit allowed under this section
exceeds the net tax, the excess credit may be carried over to reduce
the net tax in the following year, and succeeding taxable years, if
necessary, until the credit has been exhausted.
(m) A project that received an allocation of a 1989 federal
housing credit dollar amount shall be eligible to receive an
allocation of a 1990 state housing credit dollar amount, subject to
all of the following conditions:
(1) The project was not placed in service prior to 1990.
(2) To the extent the amendments made to this section by the
Statutes of 1990 conflict with any provisions existing in this
section prior to those amendments, the prior provisions of law shall
prevail.
(3) Notwithstanding paragraph (2), a project applying for an
allocation under this subdivision shall be subject to the
requirements of paragraph (3) of subdivision (j).
(n) The credit period with respect to an allocation of credit in
1989 by the California Tax Credit Allocation Committee of which any
amount is attributable to unallocated credit from 1987 or 1988 shall
not begin until after December 31, 1989.
(o) The provisions of Section 11407(a) of Public Law 101-508,
relating to the effective date of the extension of the low-income
housing credit, shall apply to calendar years after 1989.
(p) The provisions of Section 11407(c) of Public Law 101-508,
relating to election to accelerate credit, shall not apply.
(q) Any unused credit may continue to be carried forward, as
provided in subdivision (l), until the credit has been exhausted.
This section shall remain in effect on and after December 1, 1990,
for as long as Section 42 of the Internal Revenue Code, relating to
low-income housing credits, remains in effect.
(r) The amendments to this section by the act adding this
subdivision shall apply only to taxable years beginning on or after
January 1, 1994.
SEC. 7. Section 23610.5 of the Revenue and Taxation Code is
amended to read:
23610.5. (a) (1) There shall be allowed as a credit against the
"tax" (as defined by Section 23036) a state low-income housing tax
credit in an amount equal to the amount determined in subdivision
(c), computed in accordance with Section 42 of the Internal Revenue
Code of 1986, except as otherwise provided in this section.
(2) "Taxpayer," for purposes of this section, means the sole owner
in the case of a "C" corporation, the partners in the case of a
partnership, and the shareholders in the case of an "S" corporation.
(3) "Housing sponsor," for purposes of this section, means the
sole owner in the case of a "C" corporation, the partnership in the
case of a partnership, and the "S" corporation in the case of an "S"
corporation.
(b) (1) The amount of the credit allocated to any housing sponsor
shall be authorized by the California Tax Credit Allocation
Committee, or any successor thereof, based on a project's need for
the credit for economic feasibility in accordance with the
requirements of this section.
(A) The low-income housing project shall be located in California
and shall meet either of the following requirements:
(i) Except for projects to provide farmworker housing, as defined
in subdivision (h) of Section 50199.7 of the Health and Safety Code,
that are allocated credits solely under the set-aside described in
subdivision (c) of Section 50199.20 of the Health and Safety Code,
the project's housing sponsor has been allocated by the California
Tax Credit Allocation Committee a credit for federal income tax
purposes under Section 42 of the Internal Revenue Code.
(ii) It qualifies for a credit under Section 42(h)(4)(B) of the
Internal Revenue Code.
(B) The California Tax Credit Allocation Committee shall not
require fees for the credit under this section in addition to those
fees required for applications for the tax credit pursuant to Section
42 of the Internal Revenue Code. The committee may require a fee if
the application for the credit under this section is submitted in a
calendar year after the year the application is submitted for the
federal tax credit.
(C) (i) For a project that receives a preliminary reservation of
the state low-income housing tax credit, allowed pursuant to
subdivision (a), on or after January 1, 2009, and before January 1,
2016, the credit shall be allocated to the partners of a partnership
owning the project in accordance with the partnership agreement,
regardless of how the federal low-income housing tax credit with
respect to the project is allocated to the partners, or whether the
allocation of the credit under the terms of the agreement has
substantial economic effect, within the meaning of Section 704(b) of
the Internal Revenue Code.
(ii) To the extent the allocation of the credit to a partner under
this section lacks substantial economic effect, any loss or
deduction otherwise allowable under this part that is attributable to
the sale or other disposition of that partner's partnership interest
made prior to the expiration of the federal credit shall not be
allowed in the taxable year in which the sale or other disposition
occurs, but shall instead be deferred until and treated as if it
occurred in the first taxable year immediately following the taxable
year in which the federal credit period expires for the project
described in clause (i).
(iii) This subparagraph shall not apply to a project that receives
a preliminary reservation of state low-income housing tax credits
under the set-aside described in subdivision (c) of Section 50199.20
of the Health and Safety Code unless the project also
receives a preliminary reservation of federal low-income housing tax
credits.
(iv) This subparagraph shall cease to be operative with respect to
any project that receives a preliminary reservation of a credit on
or after January 1, 2016.
(2) (A) The California Tax Credit Allocation Committee shall
certify to the housing sponsor the amount of tax credit under this
section allocated to the housing sponsor for each credit period.
(B) In the case of a partnership or an "S" corporation, the
housing sponsor shall provide a copy of the California Tax Credit
Allocation Committee certification to the taxpayer.
(C) The taxpayer shall, upon request, provide a copy of the
certification to the Franchise Tax Board.
(D) All elections made by the taxpayer pursuant to Section 42 of
the Internal Revenue Code shall apply to this section.
(E) For buildings located in designated difficult development
areas or qualified census tracts as defined in Section 42(d)(5)(C) of
the Internal Revenue Code, credits may be allocated under this
section in the amounts prescribed in subdivision (c), provided that
the amount of credit allocated under Section 42 of the Internal
Revenue Code is computed on 100 percent of the qualified basis of the
building.
(c) Section 42(b) of the Internal Revenue Code shall be modified
as follows:
(1) In the case of any qualified low-income building placed in
service by the housing sponsor during 1987, the term "applicable
percentage" means 9 percent for each of the first three years and 3
percent for the fourth year for new buildings (whether or not the
building is federally subsidized) and for existing buildings.
(2) In the case of any qualified low-income building that receives
an allocation after 1989 and is a new building not federally
subsidized, the term "applicable percentage" means the following:
(A) For each of the first three years, the percentage prescribed
by the Secretary of the Treasury for new buildings that are not
federally subsidized for the taxable year, determined in accordance
with the requirements of Section 42(b)(2) of the Internal Revenue
Code, in lieu of the percentage prescribed in Section 42(b)(1)(A).
(B) For the fourth year, the difference between 30 percent and the
sum of the applicable percentages for the first three years.
(3) In the case of any qualified low-income building that receives
an allocation after 1989 and that is a new building that is
federally subsidized or that is an existing building that is "at risk
of conversion," the term "applicable percentage" means the
following:
(A) For each of the first three years, the percentage prescribed
by the Secretary of the Treasury for new buildings that are federally
subsidized for the taxable year.
(B) For the fourth year, the difference between 13 percent and the
sum of the applicable percentages for the first three years.
(4) For purposes of this section, the term "at risk of conversion,"
with respect to an existing property means a property that satisfies
all of the following criteria:
(A) The property is a multifamily rental housing development in
which at least 50 percent of the units receive governmental
assistance pursuant to any of the following:
(i) New construction, substantial rehabilitation, moderate
rehabilitation, property disposition, and loan management set-aside
programs, or any other program providing project-based assistance
pursuant to Section 8 of the United States Housing Act of 1937,
Section 1437f of Title 42 of the United States Code, as amended.
(ii) The Below-Market-Interest-Rate Program pursuant to Section
221(d)(3) of the National Housing Act, Sections 1715(d)(3) and (5) of
Title 12 of the United States Code.
(iii) Section 236 of the National Housing Act, Section 1715z-1 of
Title 12 of the United States Code.
(iv) Programs for rent supplement assistance pursuant to Section
101 of the Housing and Urban Development Act of 1965, Section 1701s
of Title 12 of the United States Code, as amended.
(v) Programs pursuant to Section 515 of the Housing Act of 1949,
Section 1485 of Title 42 of the United States Code, as amended.
(vi) The low-income housing credit program set forth in Section 42
of the Internal Revenue Code.
(B) The restrictions on rent and income levels will terminate or
the federally insured mortgage on the property is eligible for
prepayment any time within five years before or after the date of
application to the California Tax Credit Allocation Committee.
(C) The entity acquiring the property enters into a regulatory
agreement that requires the property to be operated in accordance
with the requirements of this section for a period equal to the
greater of 55 years or the life of the property.
(D) The property satisfies the requirements of Section 42(e) of
the Internal Revenue Code regarding rehabilitation expenditures,
except that the provisions of Section 42(e)(3)(A)(ii)(I) shall not
apply.
(d) The term "qualified low-income housing project" as defined in
Section 42(c)(2) of the Internal Revenue Code is modified by adding
the following requirements:
(1) The taxpayer shall be entitled to receive a cash distribution
from the operations of the project, after funding required reserves,
which, at the election of the taxpayer, shall be equal to:
(A) An amount not to exceed 8 percent of the lesser of:
(i) The owner equity, which shall include the amount of the
capital contributions actually paid to the housing sponsor and shall
not include any amounts until they are paid on an investor note.
(ii) Twenty percent of the adjusted basis of the building as of
the close of the first taxable year of the credit period.
(B) The amount of the cashflow from those units in the
building that are not low-income units. For purposes of computing
cashflow under this subparagraph, operating costs shall be allocated
to the low-income units using the "floor space fraction," as defined
in Section 42 of the Internal Revenue Code.
(C) Any amount allowed to be distributed under subparagraph (A)
that is not available for distribution during the first five years of
the compliance period may accumulate and be distributed at any time
during the first 15 years of the compliance period but not
thereafter.
(2) The limitation on return shall apply in the aggregate to the
partners if the housing sponsor is a partnership and in the aggregate
to the shareholders if the housing sponsor is an "S" corporation.
(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(g)(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 later of the taxable years 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 12206, and Section 17058 shall be
an amount equal to the sum of all the following:
(1) 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.
(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 this 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:
(1) A term not less than the compliance period.
(2) A requirement that the agreement be filed in the official
records of the county in which the qualified low-income housing
project is located.
(3) A provision stating which state and local agencies can enforce
the regulatory agreement in the event the housing sponsor fails to
satisfy any of the requirements of this section.
(4) A provision that the regulatory agreement shall be deemed a
contract enforceable by tenants as third-party beneficiaries thereto,
and that allows individuals, whether prospective, present, or former
occupants of the building, who meet the income limitation applicable
to the building the right to enforce the regulatory agreement in any
state court.
(5) A provision incorporating the requirements of Section 42 of
the Internal Revenue Code as modified by this section.
(6) A requirement that the housing sponsor notify the California
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) A provision that 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.
(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 that there is a need 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 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
site for the project.
(v) The housing sponsor shall demonstrate that the project
complies with all applicable local land use and zoning ordinances.
(vi) The housing sponsor shall demonstrate that the project
development team has the experience and the financial capacity to
ensure project completion and operation for the extended use period.
(vii) The housing sponsor shall demonstrate the amount of tax
credit that is necessary for the financial feasibility of the project
and its viability as a qualified low-income housing project
throughout the extended use period, taking into account operating
expenses, a supportable debt service, reserves, funds set aside for
rental subsidies, and required equity, and a development fee that
does not exceed a specified percentage of the eligible basis of the
project prior to inclusion of the development fee in the eligible
basis, as determined by the committee.
(B) The committee shall give a preference to those projects
satisfying all of the threshold requirements of subparagraph (A) if
both of the following apply:
(i) The project serves the lowest income tenants at rents
affordable to those tenants.
(ii) The project is obligated to serve qualified tenants for the
longest period.
(C) In addition to the provisions of subparagraphs (A) and (B),
the committee shall use the following criteria in allocating housing
credits:
(i) Projects serving large families in which a substantial number,
as defined by the committee, of all residential units are low-income
units with three and more bedrooms.
(ii) Projects providing single-room occupancy units serving very
low income tenants.
(iii) Existing projects that are "at risk of conversion," as
defined by paragraph (4) of subdivision (c).
(iv) Projects for which a public agency provides direct or
indirect long-term financial support for at least 15 percent of the
total project development costs or projects for which the owner's
equity constitutes at least 30 percent of the total project
development costs.
(v) Projects that provide tenant amenities not generally available
to residents of low-income housing projects.
(4) For purposes of allocating credits pursuant to this section,
the committee shall not give preference to any project by virtue of
the date of submission of its application except to break a tie when
two or more of the projects have an equal rating.
(5) Not less than 20 percent of the low-income housing tax credits
available annually under this section, Section 12206, and Section
17058 shall be set aside for allocation to rural areas as defined in
Section 50199.21 of the Health and Safety Code. Any amount of credit
set aside for rural areas remaining on or after October 31 of any
calendar year shall be available for allocation to any eligible
project. No amount of credit set aside for rural areas shall be
considered available for any eligible project so long as there are
eligible rural applications pending on October 31.
(k) Section 42() of the Internal Revenue Code shall be modified as
follows:
The term "secretary" shall be replaced by the term "California
Franchise Tax Board."
(l) In the case where the state credit allowed under this section
exceeds the "tax," the excess may be carried over to reduce the "tax"
in the following year, and succeeding years if necessary, until the
credit has been exhausted.
(m) A project that received an allocation of a 1989 federal
housing credit dollar amount shall be eligible to receive an
allocation of a 1990 state housing credit dollar amount, subject to
all of the following conditions:
(1) The project was not placed in service prior to 1990.
(2) To the extent the amendments made to this section by the
Statutes of 1990 conflict with any provisions existing in this
section prior to those amendments, the prior provisions of law shall
prevail.
(3) Notwithstanding paragraph (2), a project applying for an
allocation under this subdivision shall be subject to the
requirements of paragraph (3) of subdivision (j).
(n) The credit period with respect to an allocation of credit in
1989 by the California Tax Credit Allocation Committee of which any
amount is attributable to unallocated credit from 1987 or 1988 shall
not begin until after December 31, 1989.
(o) The provisions of Section 11407(a) of Public Law 101-508,
relating to the effective date of the extension of the low-income
housing credit, shall apply to calendar years after 1989.
(p) The provisions of Section 11407(c) of Public Law 101-508,
relating to election to accelerate credit, shall not apply.
(q) (1) A corporation may elect to assign any portion of any
credit allowed under this section to one or more affiliated
corporations for each taxable year in which the credit is allowed.
For purposes of this subdivision, "affiliated corporation" has the
meaning provided in subdivision (b) of Section 25110, as that section
was amended by Chapter 881 of the Statutes of 1993, as of the last
day of the taxable year in which the credit is allowed, except that
"100 percent" is substituted for "more than 50 percent" wherever it
appears in the section, as that section was amended by Chapter 881 of
the Statutes of 1993, and "voting common stock" is substituted for
"voting stock" wherever it appears in the section, as that section
was amended by Chapter 881 of the Statutes of 1993.
(2) The election provided in paragraph (1):
(A) May be based on any method selected by the corporation that
originally receives the credit.
(B) Shall be irrevocable for the taxable year the credit is
allowed, once made.
(C) May be changed for any subsequent taxable year if the election
to make the assignment is expressly shown on each of the returns of
the affiliated corporations that assign and receive the credits.
(r) Any unused credit may continue to be carried forward, as
provided in subdivision (k), until the credit has been exhausted.
This section shall remain in effect on or after December 1, 1990,
for as long as Section 42 of the Internal Revenue Code, relating to
low-income housing credits, remains in effect.
(s) The amendments to this section made by the act adding this
subdivision shall apply only to taxable years beginning on or after
January 1, 1994, except that paragraph (1) of subdivision (q), as
amended, shall apply to taxable years beginning on or after January
1, 1993.
