BILL ANALYSIS
AB 884
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Date of Hearing: April 16, 2007
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Charles Calderon, Chair
AB 884 (Dymally) - As Amended: April 11, 2007
Majority vote. Fiscal committee.
SUBJECT : Low income housing tax credit: Allocation program
SUMMARY : Amends existing rules dealing with the allocation of
tax credits for low-income housing. Specifically, this bill :
1)States that public interest purpose is best served for
allocation of tax credits for low-income housing by special
efforts in urban areas and for projects sponsored by
community-based nonprofit organizations.
2)States that public interest is best served by the allocation
of tax credits under a system that allows fair competition for
new tax credit sponsors and developers.
3)Adds two additional voting members to the California Tax
Credit Allocation Committee (TCAC): One appointed by the
Senate Committee on Rules and one appointed by the Speaker of
the Assembly.
4)Expands credit allocation criteria to include infill projects
and those that eliminate urban blight.
EXISTING LAW provides for a TCAC composed of the Governor (or
the Director of Finance in the Governor's absence), the
Controller, and the Treasurer. The Director of Housing and
Community Development, the Executive Director of the California
Housing Finance Agency, and two representatives of local
government serve TCAC as ex officio, nonvoting members. The
local government representatives are members of the California
Legislature appointed to represent the interests of cities and
counties.
The TCAC is authorized to allocate low-income housing credits
for both federal and California tax purposes. Currently, TCAC
is directed to develop and provide application forms for use by
housing credit applicants and has adopted uniform procedures for
AB 884
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submission and review of applications. The current credit
allocation plan contains two different processes: One is
competitive among developers; one follows tax exempt bond caps.
The competitive process requires developers to apply for TCAC
credits in one of two annual rounds of funding. The project
application competes with applications by other projects; the
credits are awarded based upon a point system reflecting
specific priorities of the state. Currently, California sets
aside certain percentages of the credits to be awarded for
projects in the following categories: Non-profits, rural, small
development, at-risk, special needs, and credit holdback. TCAC
also considers California's priorities for the project's housing
type (large family, single room occupancy, special needs,
seniors, and at-risk individuals).
FISCAL EFFECT : This bill modifies the criteria by which credits
are allocated and changes the voting membership of the TCAC. No
impact on the General Fund is anticipated by this bill.
Proposition 98 Fiscal Impact : None.
COMMENTS : The author states that the Legislature does not have
any voting member appointments to the TCAC and notes that, over
the last ten years, the TCAC has changed the criteria for
awarding the limited tax credits without legislative input.
This bill gives the California Legislature two voting members on
the TCAC.
Assemblymember Dymally states, "The primary objective of this
measure is to ensure that the TCAC process of allocating credits
is fair and impartial to small and emerging firms. The TCAC
process of allocating credits should provide a fair opportunity
for small and emerging firms to secure an allocation of credits
to rehabilitate, reposition and development low-income rental
real estate projects."
REGISTERED SUPPORT / OPPOSITION :
Support
None in file
Opposition
None in file
AB 884
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Analysis Prepared by : Kimberly Bott / REV. & TAX. / (916)
319-2098