Amended in Assembly March 18, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 1920

Introduced by Assembly Member Chau

February 11, 2016

An act to amend Section 50199.10 of the Health and Safety Code, relating to housing, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 1920, as amended, Chau. California Tax Credit Allocation Committee: low-income housing credit: fines.

Under existing law, the California Tax Credit Allocation Committee administers the federal and state low-income housing tax credit programs. Existing law requires the committee to allocate the housing credit on a specified regular basis and requires the committee to only allocate credits to a project if the housing sponsor enters into a specified regulatory agreement. Existing law authorizes the committee to make any allocation or reservation of the state’s housing credit ceiling to a housing credit applicant subject to specified terms and conditions.

Existing law establishes the Housing Rehabilitation Loan Fund, which is continuously appropriated to the Department of Housing and Community Development, to fund various housing-related purposes.

This bill would authorize the committee to establish a specified schedule of fines for violations of the terms and conditions, the regulatory agreement, covenants, or program regulations. The bill would require these fines to be deposited in the Housing Rehabilitation Loan Fund and would authorize the committee to record a property lien if the fine has not been paid within a specified period of time. By depositing these fines into the Housing Rehabilitation Loan Fund, a continuously appropriated fund, the bill would make an appropriation.

Vote: ²⁄₃. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

Section 50199.10 of the Health and Safety Code
is amended to read:

50199.10.  

(a) For purposes of allocating low-income housing
credits, the committee is hereby designated as this state’s only
housing credit agency for purposes of Section 42(h) of the federal
Internal Revenue Code (26 U.S.C. Sec. 42(h)). The committee
shall annually determine and shall allocate the state ceiling in
accordance with this chapter and in conformity with federal law.
The committee shall determine the housing credit ceiling as soon
as possible following the effective date of this chapter and
thereafter following the commencement of each calendar year.
The committee shall undertake any and all responsibilities of
housing credit agencies under Section 42 of Title 26 of the United
States Code, including entering into regulatory agreements relating
to projects that are granted awards.

(b) The committee shall develop and provide application forms
for use by housing credit applicants. The committee shall adopt
uniform procedures for submission and review of applications of
housing credit applicants, including fees to defray the committee’s
costs in administering this chapter. In the committee’s discretion,
the fees shall be charged to a housing credit applicant as a condition
of submitting an application or as a condition of receiving an
allocation or reservation of the state’s current or anticipated
housing credit ceiling, or both.

(c) In addition to allocating the current housing credit ceiling,
the committee may reserve a portion of the state’s anticipated
housing credit ceiling for a subsequent year for a housing credit
applicant.

(d) As a condition to making an allocation of the housing credit
ceiling or a reservation of the anticipated housing credit ceiling
for a subsequent year, the committee may require the housing
credit applicant receiving the allocation or reservation to deposit
with the committee an amount of money as a good-faith
undertaking. The committee shall adopt policies for determining
when deposits will be required, prescribing procedures for return
of deposits, and specifying the circumstances under which the
deposits will be forfeited in whole or in part for failure to timely
utilize the allocation or reservation provided to the housing credit
applicant.

(e) (1) The committee may make any allocation or reservation
of the state’s housing credit ceiling to a housing credit applicant
subject to terms and conditions in furtherance of the purposes of
this part. The committee may condition an allocation or reservation
on the execution of a contract between the housing credit applicant
and the committee requiring the housing credit applicant to comply
with all the terms of Section 42 of the federal Internal Revenue
Code, any applicable state laws, and any additional requirements
the committee deems necessary or appropriate to serve the purposes
of this chapter, and providing for legal action to obtain specific
performance or monetary damages for breach of contract.

(2) No allocations or reservations shall be made pursuant to this
subdivision with respect to projects that do not meet the
requirements of the qualified allocation plan, and no allocations
or reservations shall be made in amounts that do not meet the
requirements of paragraph (2) of subsection (m) of Section 42 of
Title 26 of the United States Code.

(3) (A) With respect to an allocation or reservation, the
committee may establish a schedule of fines for violations of the
terms and conditions, the regulatory agreement, covenants, or
program regulations. In developing the schedule of fines, the
committee shall establish the fines for violations in an amount begin delete of end delete
begin insert up to end insert five hundred dollars ($500) per violation or double the
amount of the financial gain to the housing credit applicant because
of the violation, whichever is greater. These fines may be a
recurring amount if the violation is not corrected within a
reasonable period of time, as determined by the committee.

(B) By resolution at a public general committee meeting, the
committee shall adopt and may revise the schedule of fines, which
shall include specific violations of the terms and conditions, the
regulatory agreement, covenants, or program regulations and fine
amounts subject to the criteria in subparagraph (A).

(C) All fines shall be deposited in the Housing Rehabilitation
Loan Fund established in Section 50661.

(D) If a fine is not paid within six months from the date when
the fine was initially assessed by the committee and after
reasonable notice has been provided to the housing credit applicant,
the committee may record a lien against the property. begin insert Consistent
with Sections 1214 and 1215 of the Civil Code, a lien created
pursuant to this paragraph shall not be superior to any lien
recorded prior to the recording of this lien. end insert