BILL ANALYSIS Ó
AB 2817
Page A
Date of Hearing: May 9, 2016
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Sebastian Ridley-Thomas, Chair
AB 2817
(Chiu) - As Amended March 17, 2016
Majority vote. Fiscal committee. Tax levy.
SUBJECT: Taxes: credits: low-income housing: allocation
increase
SUMMARY: Modifies the existing Low-Income Housing Tax Credit
(LIHTC) program and increases the aggregate credit amount that
may be annually allocated to low-income housing projects by $300
million for the 2017 calendar year and each calendar year
thereafter. Specifically, this bill:
1)Beginning in 2017 and each year thereafter, increases the
amount of state LIHTC by an additional $300 million, as
adjusted for inflation beginning in 2018.
2)Increases the amount that may be allocated to farmworker
housing projects, as specified, from $500,000 to $25 million
per calendar year. The amount of any unallocated or returned
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credits, however, must be added to the aggregate amount of
LIHT credits available to other non-farmworker qualified
projects.
3)Provides that a low-income housing building that has received
an award of 9% federal LIHTC is not eligible for an allocation
from the additional $300 million of state LIHTC, but shall
remain eligible for the existing $70 million allocation, as
annually adjusted.
4)Modifies the allocation of state LIHTC that may be awarded to
a federally subsidized low-income housing project receiving
federal 4% LIHTC as follows:
a) A new qualified low-income housing building is eligible
for a cumulative state LIHTC over four years of 50% of the
qualified basis of the building, provided that the building
is not located in a Difficult to Develop Area (DDA) or a
Qualified Census Tract (QCT).
b) An existing qualified low-income housing building that
is not located in a DDA or a QCT is eligible for a
cumulative state LIHTC over four years of 13% of the
qualified basis of the building.
c) A new or existing low-income housing building that is
located in a DDA or QCT may be awarded a cumulative state
LIHTC in an amount not to exceed 50% of the qualified basis
of the building, provided that the federal LIHTC is
replaced with state LIHTC, as specified.
d) A qualified low-income building is eligible for a
cumulative state LIHTC of 95% of the qualified basis over
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four years if it meets all of the following requirement:
i) It is at least 15 years old;
ii) It is serving households of very low-income or
extremely low-income residents, provided that the average
income at the time of admission is no more than 45% of
the area median gross income adjusted for household size
and a tax credit regulatory agreement is entered into a
for a period of not less than 55 year, as specified;
iii) It would, otherwise, receive insufficient state
credits due to the building's low appraised value, to
complete substantial rehabilitation; and,
iv) It will complete the substantial rehabilitation in
connection with the LIHTC allocation.
5)Revises the definition of a "taxpayer" for purposes of the
state LIHTC program to include members of a limited liability
company.
6)Revises the definition of a "housing sponsor" for purposes of
the LIHTC program to include a limited liability company.
7)Adds the following definitions:
a) "Extremely low-income" has the same meaning as this
phrase is defined in Health and Safety Code (H&SC) Section
50053; and,
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b) "Very low-income" has the same meaning as this phrase is
defined in H&SC Section 50053.
1)Makes technical, non-substantive changes to the provisions of
the LITHC program.
2)Takes effect immediately as a tax levy.
EXISTING LAW:
1)Allows a state tax credit for costs related to construction,
rehabilitation, or acquisition of low-income housing. This
credit, which mirrors a federal LIHTC, may be used by
taxpayers to offset the tax under the Personal Income Tax
(PIT), the Corporation Tax (CT), and the Insurance Tax (IT)
laws.
2)Requires the California Tax Credit Allocation Committee (TCAC)
to allocate each year the California LIHTC based upon
qualification of the applicant and proposed project. The
California LIHTC is available only to projects that received
an allocation of the federal LIHTC.
3)Limits the annual aggregate amount of the state LIHTC to $70
million, as adjusted for an increase in the California
consumer price index from 2002, plus any unused LIHTC for the
preceding calendar year and any LIHTC returned in the calendar
year. The California LIHTC awarded may be claimed as a credit
against tax over a four-year period.
4)Requires TCAC to certify the amount of tax credit amount
allocated. In the case of a partnership or an S Corporation,
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a copy of the certificate is provided to each taxpayer. The
taxpayer is required, upon request, to provide a copy of the
certificate to the Franchise Tax Board (FTB).
5)Allows any unused credit to be carried forward until the
credit is exhausted.
6)Allows TCAC to award state LIHTCs to developments in a QCT or
a DDA, if the project is also receiving federal LIHTC, under
the following conditions:
a) The amount of state credit is computed on 100% of the
qualified basis of the building; or,
b) If the usage of at least 50% of the units in a
low-income housing building is restricted to special needs
households, the amount of an allowable state LIHTC may not
exceed 30% of the eligible basis of the building.
1)Allows TCAC to replace federal LIHTC with state LIHTC of up to
30% of a project's eligible basis of a building, if the
federal LIHTC is reduced in an equivalent amount.
2)Defines a "QTC" as any census tract designated by the federal
Department of Housing and Urban Development (HUD) in which
either 50% or more of the households have an income that is
less than 60% of the area median gross income or that has a
poverty rate of at least 25%.
3)Defines a "DDA" as an area designated by HUD on an annual
basis that has high construction, land, and utility costs
relative to area median gross income.
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4)Provides that a low-income housing development that is a new
building and is receiving 9% federal LIHTC credits is eligible
to receive state LIHTC over four years of 30% of the qualified
basis of the building.
5)Provides that a low-income housing development that is a new
building receiving federal LIHTC that is "at risk of
conversion" is eligible to receive state LIHTC over four years
of 13% of the qualified basis of the building.
6)Defines "at risk of conversion" as a property that satisfies
all of the following criteria:
a) A multifamily rental housing development in which at
least 50% of the units receive government assistance
pursuant to any of the following:
b) Project based Section 8 vouchers;
c) Below-Market-Interest-Rate Program;
d) Federal Rental Housing Assistance Program;
e) Programs for rent supplement assistance pursuant to
Section 101 of the Housing and Urban Development Act of
1965;
f) Programs pursuant to Section 515 of the Housing Act of
1949; and,
g) Federal LIHTC.
FISCAL EFFECT: The Franchise Tax Board (FTB) staff estimates
that this bill would result in an annual revenue loss of $190
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million in the fiscal year (FY) 2015-16, $180 million in FY
2016-17, and $180 million in FY 2017-18.
COMMENTS:
1)Author's Statement . The author has provided the following
statement in support of this bill:
"California is undergoing a serious housing affordability crisis
with a shortfall of over one million affordable homes.
According to a 2014 report by the California Housing
Partnership Corporation, median rents in California have
increased by over 20 percent while the median income has
dropped by 8 percent. The private housing market is simply not
meeting the demand for low to moderate income homes. The
shortage is particularly challenging in the rental market,
typically the last resort for lower-income households, many of
whom were forced out of single-family homes during the great
recession.
"State and Federal divestment in affordable housing has
exacerbated this problem. With the elimination of California's
redevelopment agencies and the exhaustion of state housing
bonds, California has reduced its funding for the development
and preservation of affordable homes by 79 percent -- from
approximately $1.7 billion a year to nearly nothing. There is
currently no permanent source of funding to compensate for
this loss.
"The housing crisis has contributed to a growing homeless
population, increased pressure on local public safety nets, an
unstable development and construction marketplace, and the
outward migration of thousands of long-time California
residents.
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"The LIHTC program is the only major source of funding
available for affordable development in the state, making it
competitive and overprescribed. In 2014, only 49 percent of
applicants were awarded credits - leaving many qualified
projects without a secure source of funding or any incentive
to build additional affordable housing units."
2)Arguments in Support . The proponents of this bill
state"[s]ince 2008, rents have skyrocketed, while at the same
time, state and federal investment in affordable home
production dropped 66%," affecting Californians at nearly
every income level." They assert that challenges of funding
affordable housing development "have increased significantly
with the loss of over $1 billion per year of redevelopment
housing funds." The proponents maintain that many affordable
housing projects are either greatly delayed or never developed
because of the lack of the tax credit allocation.
According to proponents, this bill "directly responds to our
state's shortfall of over one million affordable homes and the
continued dramatic rise in rents at a time when the median
income has been falling." By increasing the annual state tax
credit allocation amounts to $300 million, this bill will
allow California to leverage "an additional $600 million in
federal housing resources that would otherwise go unclaimed by
our state." In total, "the investment of state funds will
allow [the State] to access $200 million in federal 4% credits
and at least another $400 million federal tax-exempt bond
authority." The proponents argue that this bill "will result
in the development of additional and much needed affordable
housing across the state" and will also "contribute to state
and local tax revenues through economic activity and jobs."
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3)Federal LIHTC Program: Background . The LIHTC is an indirect
federal subsidy developed in 1986 to incentivize the private
development of affordable rental housing for low-income
households. As explained by the TCAC, the federal LIHTC
program replaced traditional housing tax incentives, such as
accelerated depreciation, with a tax credit that enables
low-income housing sponsors and developers to raise project
equity through the allocation of tax benefits to investors.
Two types of federal tax credits are available: the 9% and 4%
credits. These terms refer to the approximate percentage of a
project's "qualified basis" a taxpayer may deduct from his/her
annual federal tax liability in each of 10 years. For
projects that are not financed with a federal subsidy, the
applicable rate is 9%. For projects that are federally
subsidized (including projects financed more than 50% with
tax-exempt bonds), the applicable rate is 4%. Although the
credits are known as the "9% and 4% credits", the actual tax
rates fluctuate every month, based on the determination made
by the Internal Revenue Service on a monthly basis.
Nonetheless, Congress has established the minimum applicable
percentage of 9% for allocations made for non-federally
subsidized new buildings before January 1, 2015.
Each year, the Federal Government allocates funding to the
states for LIHTCs on the basis of a per-resident formula.
State or local housing authorities review proposals submitted
by developers and select projects based on a variety of
prescribed criteria. Only rental housing buildings, which are
either undergoing rehabilitation or newly constructed, are
eligible for the LIHTC programs. In addition, the qualified
low-income housing projects must comply with both rent and
income restrictions. Rents on tax credit units cannot exceed
30% of an imputed income based on 1.5 persons per bedroom.
Furthermore, the initial incomes of households in those units
may not exceed either 60% or 50% of the area median income,
adjusted for household size. A project developer or sponsor
who applies for the tax credit allocation must also elect to
set aside a minimum of either 40% of the units to be occupied
by households with incomes of 60% or less of the area median
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gross income or 20% of the units to household with incomes of
50% or less of the area median gross income. Finally, credit
projects must remain affordable for at least 30 years.
However, in California, project developers or housing sponsors
must agree to a minimum of 55 years rent and income
restrictions.
Federal law specifies that each state must designate a
"housing credit agency" to administer the federal LIHTC
program. In California, responsibility for administering the
federal program is assigned to the California TCAC.
a) The 9% credit: projects not financed with a federal
subsidy . In 2014, the amount of the 9% LIHTC credit
allocated by the Federal Government to each state was based
on $2.30 per capita. In addition, states annually qualify
for a pro rata share of credits in a national pool of
unused credits. From the total amount of federal LIHTC
available to California calendar year, the TCAC allocates
this credit to housing sponsors of qualified projects based
on the estimated amount of eligible costs, as defined in
Internal Revenue Code (IRC) Section 42, minus
non-depreciable costs (such as land, permanent financing
costs, rent reserves and marketing expenses). The amount
of the credit is calculated by multiplying this "eligible
basis" of the project by the "applicable fraction"<1> and
then by the LIHTC 9% rate (in reality, that rate fluctuates
monthly and currently is set at 7.70%). If the development
is located in the HUD-designated DDA or QCT, the
development's "eligible basis" receives a 30% increase or
"basis boost." This "boost" allows qualified low-income
housing projects to receive a credit equal to 130% of its
"eligible basis." The 9% credit is awarded on a
competitive basis so that only those projects that meet the
highest housing priorities and public policy objectives, as
--------------------------
<1> The "applicable fraction" is defined as the smaller of: (1)
the percentage of low-income units to total units, or (2) the
percentage of square footage of the low-income units to the
square footage of the total units.
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determined by the TCAC, have access to this credit.
b) The 4% credit: federally subsidized projects . Unlike
the 9% credit, the amount of 4% credit allocated to states
is not limited on a per capita basis. In order to access
the 4% credit, a developer must first obtain an allocation
of tax-exempt private activity mortgage revenue bonds,
which are allocated to states on a per capita basis. The
amount of the 4% credit is calculated in the same manner as
the 9% credit, but an "eligible basis" is multiplied by the
federal 4% tax credit. The actual rate also fluctuates and
currently TCAC uses 3.36% to determine a project's initial
tax credit reservation.
Tax-exempts bonds are debt obligations issued by state or
local government agencies for multi-family rental housing,
infrastructure improvements and other qualified municipal
endeavors having a public purpose. Federal tax law
provides that interest on any obligation issued by, or on
behalf of, any state or political subdivision is excluded
from gross income [IRC Section 103(a)]. Federal tax law
limits this exemption in the case of private activity bonds
[IRC Section 103(b)], but allows certain facilities to be
financed with tax-exempt bonds. Qualified private activity
bonds are issued by government agencies on behalf of
private businesses and may be issued for various purposes,
including low-income, multi-family housing. Unlike typical
municipal bonds, the payment of principal and interest on
private activity bonds is not the responsibility of the
issuing government agency. Instead, the payment is the
responsibility of the private business receiving the
proceeds. The interest rate on tax-exempt bonds is lower
than conventional bank financing, and these savings can
promote housing affordability. These bonds assist
developers of multifamily rental housing units to acquire
land and construct new units or purchase and rehabilitate
existing units. The developers, in turn, produce market
rate and affordable rental housing for low- and very
low-income households by reducing rental rates to these
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individuals and families. Projects that receive an award
of bond authority have the right to apply for
non-competitive 4% LIHTC allocations.
Federal law imposes a limit on how much private activity
bonds can be issued in a state each year. Agencies and
organizations authorized to issue tax-exempt private
activity bonds or mortgage credit certificates must receive
an allocation from the California Debt Limit Allocation
Committee (CDLAC). The limit is determined by a state's
population, multiplied by a specified dollar amount. Out
of the 2015 state debt ceiling of over $3.8 billion,
multifamily housing reservations account for $1.25 billion.
In 2014, California developers, according to the California
Housing Partnership, used $80.5 million in annual federal
4% credits, which is a significantly lower amount in
comparison to prior years when the redevelopment and
Proposition 1C funding was still available.
4)State LIHTC Program . In 1987, the Legislature authorized a
state LIHTC Program to augment the federal tax credit program.
State tax credits can only be awarded to projects that have
also received, or are concurrently receiving, an allocation of
the federal LIHTCs. The amount of state LIHTC that may be
annually allocated by the TCAC is limited to $70 million,
adjusted for inflation. In 2014, the total credit amount
available for allocation was $103 million (representing all
four years of allocation) plus any unused or returned credit
allocations from previous years. According to the annual
report issued by TCAC, the total credit amount available in
2015 was $89,452,736, plus $5,529,815 in farmworker state
credit available for agricultural worker housing. The TCAC
awarded approximately $123.1 million in state tax credits to
47 projects: thirty-nine 9% projects and eight 4% projects,
including one farmworker state credit award of $982,697.
Approximately $34 million was committed from 2016 state
credit, with $4.5 million in farmworker state credit remaining
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available for future project applicants. These 2015 state
credit awards will facilitate developing a total of 2,516
affordable housing units.
Current state tax law generally conforms to federal law with
respect to the LIHTC, except that it is limited to projects
located in California. While the state LIHTC program is
patterned after the federal LIHTC program, there are several
differences. First, investors may claim the state LIHTC over
four years rather than the 10-year federal allocation period.
Second, the rates used to determine the total amount of the
state tax credit (representing all four years of allocation)
are 30% of the qualified basis of a project that is not
federally subsidized and 13% of the qualified basis of a
project that is federally subsidized, in contrast to 70% and
30% (representing all 10 years of allocation on a
present-value basis), respectively, for purposes of the
federal LIHTCs. Furthermore, state tax credits are not
available for acquisition costs, except for previously
subsidized projects that qualify as "at-risk" of being
converted to market rate.
TCAC is authorized to replace the federal LIHTC with the state
LIHTC of up to 30% of a project's eligible basis if the
federal LIHTC is reduced in an equivalent amount. This
provision allows TCAC to increase the number of projects
funded with the limited federal credits in a given year. As
discussed, the maximum federal tax credit that can be awarded
(the 9% credit) is generally equal to 70% (on a present-value
basis) of a taxpayer's qualified basis in the project, spread
over a 10-year period. Thus, a project that receives the
maximum in both state and federal credits receives an amount
equal to 100% of the taxpayer's qualified basis over a 10-year
period.
5)DDAs and QCTs. Federal LIHTCs can be used anywhere, but a
project is given an additional 30% on its eligible basis (a
"basis boost") if the project is located in a DDA or a QCT.
These areas, by definition, have a higher poverty level and a
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higher concentration of extremely low-income or homeless
individuals and families who typically need larger housing
subsidies. Prior to 2014, TCAC was not allowed to award state
tax credits for projects located in DDAs and QCTs. The
rationale for this prohibition was that projects in these
areas could qualify for more federal tax credits through a
basis "boost" and therefore are already advantaged. State
law, however, was recently amended to authorize TCAC, in
limited cases, to award state LIHTCs for use in DDAs or QCTs,
in addition to the federal credits. To qualify, a development
must restrict at least 50% of the units to special needs
households. Projects that serve special needs populations
need larger subsidies in order to offer deeply affordable
rents.
6)The Financing Structure . In order to raise funds for
construction or rehabilitation of low-income housing
buildings, project developers or housing sponsors usually
enter into various financing transactions with private
entities. Investment partnerships are a primary source of
equity financing for LIHTC projects. A typical arrangement is
to match a corporate tax credit investor with a project
developer or sponsor, creating a partnership (such as a
general partnership or a LLC) where the investor is allocated
the LIHTCs in exchange for cash and the developer acts as a
general partner (or managing member). The money that
investors pay for the partnership interest is paid into the
LIHTC project as equity financing. Although investors are
buying an interest in a rental housing partnership, this
process is commonly referred to as "buying" tax credits
because the investors receive tax credits in return for their
investment. According to the TCAC report, partnership equity
contributed to the project in exchange for the credit usually
finances 30% to 60% of the capital costs of project
construction.
The financing of a low-income housing building construction or
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rehabilitation using the LIHTC thus requires the participation
of a private investor (mostly a taxable corporation) that
could take advantage of the credits to reduce its income tax
liability. Once the LIHTC project is placed in service, or
ready for occupancy, investors can receive their share of the
federal and/or state credits each year of the 10-year or
4-year credit period, whichever is applicable, and can use the
credit to offset federal or state income taxes otherwise owed
on their tax returns as long as the project meets the LIHTC
requirements. An investor must retain ownership of the
property (i.e., remain in the partnership) for at least 15
years after the project is placed in service in order to
receive the full benefit of the tax credits, or the tax
credits will be subject to recapture.
7)Deficiency in Current Law : According to the California
Housing Partnership, California used more of the federal 4%
LIHTC than any other state during the early part of the last
decade. However, with the elimination of California's
redevelopment agencies and the exhaustion of state housing
bond funding, developers of low-income housing have been left
with very few resources to leverage the 4% credit. As a
result, the number of newly constructed LIHTC units that have
been funded with the 4% credit has plummeted in the last two
years, from 4,000 in 2012 to fewer than 2,000 in 2014.
Existing state law prescribes two different tax credit rates -
30% and 13% - to calculate the amount of the state LIHTC. The
first tax credit is allowed for projects that are not
federally subsidized and thus qualify for the higher 9%
federal LIHTC. In contrast, federally subsidized projects
that qualify only for the 4% federal LIHTC receive the state
LIHTC in the amount equal to 13% of the project's qualified
basis. Furthermore, no state credit may be allocated to a
low-income housing project located in a DDA or QCT if the
project has received a federal LIHTC calculated on the 130% of
eligible basis unless the state LIHTC is computed on a 100% of
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the qualified basis or at least 50% of the building's units
are restricted to special need occupants. Thus, existing
state law limits the availability of the state LIHTC to
projects located outside a DDA or QCT since they do not
receive a federal "basis boost" of 30% that is available to
projects located in those areas. However, this bill's
proponents argue that developing housing in these areas is
inherently more expensive because of a higher concentration of
extremely low-income or homeless individuals and families.
8)What Does This Bill Do ? This bill would increase the state
LIHTC allocation by $300 million per year, in addition to the
existing $70 million cap, as adjusted for inflation. While
increasing the total amount of state LIHTC, this bill proposes
to limit the new funding only to projects that qualify for the
4% federal LIHTC. The projects that receive the 9% federal
LIHTC would still qualify for the state LIHTC, albeit the
annual amount of those state credits would remain at $70
million, as adjusted for inflation. The increase in the
amount of state LIHTC would allow the state to leverage an
additional $200 million in federal 4% LIHTC and at least $400
million in federal tax-exempt bond authority annually. This
additional funding is intended to be used exclusively for the
construction, rehabilitation and preservation of affordable
rental homes for a broad range of lower income households
throughout the state. The expectation is that an increase in
the amount of state LIHTC would help fill the gap in funding
that was created by the loss of redevelopment and the
exhaustion of state voter-approved bonds.
Furthermore, this bill would increase the amount of state tax
credits awarded to each qualified low-income housing project
from 13% to 50% of the qualified basis, provided the project
is also receiving a 4% federal tax credit. This increase
would apply to new construction and rehabilitation costs of
the project and would more than triple the amount of equity
that an investor in the project would receive, which would
bring the return on 4% credits in line with 9% credits and
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would likely result in greater affordability for the project.
The costs of acquiring an existing low-income building would
also be eligible for the state LIHTC allocated from the new
additional funding of $300 million, but the applicable
percentage used to calculate the amount of that credit would
be limited to 13% of the project's qualified basis.
In addition, this bill would allow state tax credits to be
awarded to qualified projects without regard to DDA or QCT
status, with the main purpose of providing enough state tax
credits to match the value of a 9% federal tax credit.
However, to ensure a level playing field between DDA/QCT areas
and non-DDA/QCT areas, this bill would explicitly allow TCAC
to adjust the new higher state credit percentage downward for
projects in DDAs or QCTs to equalize the value of the state
credit available in the different areas.
This bill would also significantly increase an amount of state
LIHTC - 95% of the qualified basis - that may be awarded to a
qualified low-income housing building that houses very
low-income or extremely low-income tenants and meets all
specified requirements, including the building's location,
age, and value.
Finally, this bill proposes to increase the amount of the
LIHTC allocation for farmworker housing. Existing law
provides for a $500,000 set-aside of LIHTC for farmworker
housing development serving farmworkers and their families.
This bill would increase this amount to $25 million and would
require any unused credits from this set-aside to go to
qualified non-farmworker housing projects that do not receive
funding under the main program.
9)A Different Kind of Credit ? The LIHTC program induces
investment into low-income housing by sanctioning a tax
shelter structure that helps compensate private investors for
allocating capital to an asset class with a relatively poor
rate of return. Low-income housing projects face many
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barriers in California: the high cost of land, labor, and
capitol, as well as state laws and policies protecting the
environment, among others. In return for providing the LIHTC,
the state arguably gets more affordable housing.
This program is much different from other tax credits. In
contrast to many tax incentives in California, the LIHTC is
targeted; capped at $70 million, as adjusted for inflation,
per calendar year; and allocated to taxpayers by the TCAC
mostly on a competitive basis. The TCAC evaluates the
applications and allocates the available funds to those
investors/developers who promise to produce the most housing
for the state's dollar. Although the program is in the form
of a tax credit, all the participants behave virtually as
though they were dealing with an allocation of grant funds.
Thus, traditionally, the state LIHTC program, similarly to the
federal program, has been administered just as though it were
an allocated grant program.
However, some opponents of the federal LIHTC program believe
that government subsidies to the supply of housing are not as
efficient as demand-based subsidies, and that the LIHTC
program is not efficient as compared with other subsidy
mechanisms.<2> Opponents also argue that the equity capital
raised from investment generally comes from syndicates of
individual investors or from corporations, at a steep price.
Furthermore, because the credit is very complex and risky to
investors, investors require high after-tax rates of return.
Finally, the costs of the LIHTC include the costs of
administration by federal and state housing and tax agencies.
10)FTB's Suggested Technical Amendments. The FTB staff
recommended the following technical amendments to this bill:
On page 2, line 17 and line 19 after "income" insert
"households"
---------------------------
<2> See, e.g., Low-Income Housing Credit, L. E. Burman, Tax
Policy Center.
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On page 14, line 10 and line 12 after "income" insert
"households"
On page 26, line 10 and line 12 after "income" insert
"households"
On page 5, line 22 after "the" delete "term at risk"
On page 14, line 3, delete "members in the case of a limited
liability company"
On page 14, lines 7-8, after "partnership" delete "the limited
liability company in the case of a limited liability company"
On page 15, line 28, after "partnership" delete "limited
liability company"
On page 26, line 3, after "partnership," delete "members in
the case of a limited liability company"
On page 26, lines 7-8, after "partnership," delete "the
limited liability company in the case of a limited liability
company"
On page 27, line 28, after "partnership," delete "limited
liability company"
11)Double-Referral . This bill was double-referred to the
Assembly Committee on Housing and Community Development. This
bill passed the Assembly Committee on Housing and Community
Development on a 7 - 0 vote on March 30, 2016. For additional
discussion of this bill's provisions, please refer to that
committee's analysis.
12)Related Legislation . AB 35 (Chiu and Atkins) is
substantially similar to this bill. AB 35 was vetoed by
Governor Brown on October 10, 2015. The Governor's veto
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message stated the following:
"I am returning the following nine bills without my signature:
"Assembly Bill 35
Assembly Bill 88
Assembly Bill 99
Assembly Bill 428
Assembly Bill 437
Assembly Bill 515
Assembly Bill 931
Senate Bill 251
Senate Bill 377
"Each of these bills creates a new tax credit or expands an
existing tax credit.
"Despite strong revenue performance over the past few years,
the state's budget has remained precariously balanced due to
unexpected costs and the provision of new services. Now,
without the extension of the managed care organization tax
that I called for in special session, next year's budget faces
the prospect of over $1 billion in cuts.
"Given these financial uncertainties, I cannot support
providing additional tax credits that will make balancing the
state's budget even more difficult. Tax credits, like new
spending on programs, need to be considered comprehensively as
part of the budget deliberations."
REGISTERED SUPPORT / OPPOSITION:
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Support
Apartment Association, California Southern Cities
Apartment Association of Orange County
Burbank Housing Development Corporation
California Apartment Association
California Building Industry Association (CBIA)
California Chamber of Commerce
California Coalition for Rural Housing
California Credit Union League
California Housing Consortium
California Rural Legal Assistance Foundation
California State Association of Counties
Cities Association of Santa Clara County
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City of Burbank
City of Dublin
City of Glendale
City of Thousand Oaks
City of Lakewood
City of Livermore
City of Santa Rosa
City of Rancho Cucamonga
Cities Association of Santa Clara County
Disability Rights California
East Bay Rental Housing Association
East Bay Development Disabilities Legislative Coalition
Housing California
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League of California Cities
Non-Profit Housing Association of Northern California
North Valley Property Owners Association
Peoples' Self Help Housing Corporation
Santa Clara County Board of Supervisors
The Arc California
United Cerebral Palsy California Collaboration
Western Center on Law and Poverty
Opposition
None on file
Analysis Prepared by:Oksana Jaffe / REV. & TAX. / (916) 319-2098
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