BILL NUMBER: AB 1246 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 16, 2009
AMENDED IN ASSEMBLY MAY 5, 2009
AMENDED IN ASSEMBLY APRIL 13, 2009
INTRODUCED BY Assembly Member Jones
FEBRUARY 27, 2009
An act to amend Section 11003.4 of the Business and Professions
Code, and to amend Section 33007.5 of, to add Sections
33007.6 and 33007.7 to, and to add Article 4 (commencing with Section
33520) to Chapter 5 of Part 1 of Division 24 of, the Health and
Safety Code, Code, to amend Section 1351 of, and to
add Chapter 5 (commencing with Section 817) to Title 2 of Part 2 of
Division 2 of, the Civil Code, and to amend Sections 33413.7 and
50073 of, and to repeal Section 33007.5 of, the Health and Safety
Code, relating to housing.
LEGISLATIVE COUNSEL'S DIGEST
AB 1246, as amended, Jones. Housing cooperative trust and
workforce Workforce housing cooperative trust.
(1) Existing law defines "limited-equity housing cooperative" to
be a corporation that meets specified criteria. Existing law exempts
a limited-equity housing cooperative from specified requirements for
the regulation of transactions of subdivided lands.
This bill would revise the definition of a "limited-equity housing
cooperative" to also apply to a "housing cooperative trust"
and "workforce housing cooperative trust." The bill would
exempt an entity as so defined from these provisions governing the
regulation of transactions of subdivided land if, among other
organizations, the Federal Home Loan Bank System or any of its member
institutions and school districts directly finance or subsidize at
least 50% of the total construction or development cost or $100,000,
whichever is less. The bill also would exempt such an entity from
these provisions if the real property to be occupied by the
cooperative was sold or leased by the Department of Transportation,
other state agency, a city, a county, or a school district for the
development of the cooperative and has a regulatory agreement, as
specified.
(2) The Community Redevelopment Law
Existing law defines "limited-equity housing cooperative" to
mean a corporation organized on a cooperative basis that meets
specified requirements.
This bill would revise the definition of a "limited-equity housing
cooperative" to also apply to a "housing cooperative trust"
and "workforce housing cooperative trust." The bill would
prohibit a board of directors from returning transfer value, either
full or partial, to a member of the board while he or she still
remains a member of the board, and would prohibit an existing member
of the board of directors from accepting the return of his or her
transfer value, either full or partial. The bill would
require authorize that, in any suit against a
board of directors and its members for not upholding the
statutes that apply to such an entity the prevailing party be awarded
all attorneys' fees and compensatory and punitive damages
based upon a breach of corporate or fiduciary duties or a
failure to comply with specified requirements, a
prevailing plaintiff recover reasonable attorneys' fees and costs
. The bill would prohibit an organization formed under
this section the act that uses public funds
from using any corporate funds to avoid compliance with the
Community Redevelopment Law its provisions , and
from pursuing dissolution if the intent or outcome is for the
members to occupy those units upon dissolution. The bill would
prohibit the members of the board of directors and the board of
directors from arranging to occupy units in fee simple or as a rental
after dissolution of the organization. The bill would impose
procedural requirements relating to the dissolution of an
organization a limited-equity housing cooperative or
workforce housing cooperative trust that receives or has
received a public subsidy.
This bill also would provide for the manner in which a workforce
housing cooperative trust is organized and operated, as specified.
The bill would make technical and conforming changes to existing
law.
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 11003.4 of the Business and Professions Code is
amended to read:
11003.4. (a) A "limited-equity housing cooperative" or a
"housing cooperative trust" or a "workforce housing
cooperative trust" is a corporation that meets the criteria of
Section 11003.2 and that also meets the criteria of Sections
33007.5 and 33007.6 of the Health and Safety Code 817
and 817.1 of the Civil Code , as applicable. Except as
provided in subdivision (b), a limited-equity housing
cooperative or workforce housing cooperative trust
shall be subject to all the requirements of this chapter
pertaining to stock cooperatives.
(b) A limited-equity housing cooperative , a housing
cooperative trust, and or a workforce housing
cooperative trust shall be exempt from the requirements of this
chapter if the limited-equity housing cooperative , housing
cooperative trust, or workforce housing cooperative trust
complies with all the following conditions:
(1) The United States Department of Housing and Urban Development,
the Farmers Home Administration United States
Department of Agriculture , the National Consumers Cooperative
Bank, the California Housing Finance Agency, or
the Public Employees' Retirement System (PERS), the State
Teachers' Retirement System (STRS), the Department of Housing
and Community Development, or the Federal Home Loan Bank
System or any of its member institutions, alone or in any combination
with each other, or with the city, county, school district, or
redevelopment agency in which the cooperative is located, directly
finances or subsidizes at least 50 percent of the total construction
or development cost or one hundred thousand dollars ($100,000),
whichever is less; or the real property to be occupied by the
cooperative was sold or leased by the Department of Transportation,
other state agency, a city, a county, or a school district for the
development of the cooperative and has a regulatory agreement
approved by the Department of Housing and Community Development for
the term of the permanent financing, notwithstanding the source of
the permanent subsidy or financing.
(2) No more than 20 percent of the total development cost of a
limited-equity mobilehome park, and no more than 10 percent of the
total development cost of other limited-equity housing cooperatives,
is provided by purchasers of membership shares.
(3) A regulatory agreement that covers the cooperative for a term
of at least as long as the duration of the permanent financing or
subsidy, notwithstanding the source of the permanent subsidy or
financing has been duly executed between the recipient of the
financing and either (A) one of the federal or state agencies
specified in paragraph (1) or (B) a local public agency that is
providing financing for the project under a regulatory agreement
meeting standards of the Department of Housing and Community
Development. The regulatory agreement shall make provision for at
least all of the following:
(A) Assurances for completion of the common areas and facilities
to be owned or leased by the limited-equity housing cooperative,
unless a construction agreement between the same parties contains
written assurances for completion.
(B) Governing instruments for the organization and operation of
the housing cooperative by the members.
(C) The ongoing fiscal management of the project by the
cooperative, including an adequate budget, reserves, and provisions
for maintenance and management.
(D) Distribution of a membership information report to any
prospective purchaser of a membership share, prior to purchase of
that share. The membership information report shall contain full
disclosure of the financial obligations and responsibilities of
cooperative membership, the resale of shares, the financing of the
cooperative including any arrangements made with any partners,
membership share accounts, occupancy restrictions, management
arrangements, and any other information pertinent to the benefits,
risks, and obligations of cooperative ownership.
(4) The federal, state, or local public agency that executes the
regulatory agreement shall satisfy itself that the bylaws, articles
of incorporation, occupancy agreement, subscription agreement, any
lease of the regulated premises, any arrangement with partners, and
arrangement for membership share accounts provide adequate protection
of the rights of cooperative members.
(5) The federal or state agency shall receive from the attorney
for the recipient of the financing or subsidy a legal opinion that
the cooperative meets the requirements of Section 33007.5 of
the Health and Safety Code 817 of the Civil Code
and the exemption provided by this section.
(c) Any limited-equity cooperative , housing cooperative
trust , or workforce housing cooperative trust that meets
the requirements for exemption pursuant to subdivision (b) may elect
to be subject to all provisions of this chapter.
(d) The developer of the cooperative shall notify the Department
of Real Estate, on a form provided by the department, that an
exemption is claimed under this section. The Department of Real
Estate shall retain this form for at least four years for statistical
purposes.
SEC. 2. Chapter 5 (commencing with Section 817) is
added to Title 2 of Part 2 of Division 2 of the Civil
Code , to read:
CHAPTER 5. HOUSING COOPERATIVES AND HOUSING COOPERATIVE TRUSTS
817. "Limited-equity housing cooperative" or a "workforce housing
cooperative trust" means a corporation organized on a cooperative
basis that, in addition to complying with Section 817.1 as may be
applicable, meets all of the following requirements:
(a) The corporation is any of the following:
(1) Organized as a nonprofit public benefit corporation pursuant
to Part 2 (commencing with Section 5110) of Division 2 of Title 1 of
the Corporations Code.
(2) Holds title to real property as the beneficiary of a trust
providing for distribution for public or charitable purposes upon
termination of the trust.
(3) Holds title to real property subject to conditions that will
result in reversion to a public or charitable entity upon dissolution
of the corporation.
(4) Holds a leasehold interest, of at least 20 years' duration,
conditioned on the corporation's continued qualification under this
section, and provides for reversion to a public entity or charitable
corporation.
(b) (1) The articles of incorporation or bylaws require the
purchase and sale of the stock or membership interest of resident
owners who cease to be permanent residents, at no more than a
transfer value determined as provided in the articles or bylaws, and
that shall not exceed the aggregate of the following:
(A) The consideration paid for the membership or shares by the
first occupant of the unit involved, as shown on the books of the
corporation.
(B) The value, as determined by the board of directors of the
corporation, of any improvements installed at the expense of the
member or a prior member with the prior approval of the board of
directors.
(C) Accumulated simple interest, an inflation allowance at a rate
that may be based on a cost-of-living index, an income index, or
market-interest index, or compound interest if specified in the
articles of incorporation or bylaws. For newly formed corporations,
accumulated simple interest shall apply. Any increment pursuant to
this paragraph shall not exceed a 10-percent annual increase on the
consideration paid for the membership or share by the first occupant
of the unit involved.
(2) For purposes of a return of transfer value, all of the
following are prohibited:
(A) A board of directors returning transfer value, either full or
partial, to a member while he or she still remains a member.
(B) An existing member accepting the return of his or her transfer
value, either full or partial.
(c) The articles of incorporation or bylaws require the board of
directors to sell the stock or membership interest purchased as
provided in subdivision (b) to new member-occupants or resident
shareholders at a price that does not exceed the "transfer value"
paid for the unit.
(d) The "corporate equity," that is defined as the excess of the
current fair marketed value of the corporation's real property over
the sum of the current transfer values of all shares or membership
interests, reduced by the principal balance of outstanding
encumbrances upon the corporate real property as a whole, shall be
applied as follows:
(1) So long as any such encumbrance remains outstanding, the
corporate equity shall not be used for distribution to members, but
only for the following purposes, and only to the extent authorized by
the board, subject to the provisions and limitations of the articles
of incorporation and bylaws:
(A) For the benefit of the corporation or the improvement of the
real property.
(B) For expansion of the corporation by acquisition of additional
real property.
(C) For public benefit or charitable purposes.
(2) Upon sale of the property, dissolution of the corporation, or
occurrence of a condition requiring termination of the trust or
reversion of title to the real property, the corporate equity is
required by the articles, bylaws, or trust or title conditions to be
paid out, or title to the property transferred, subject to
outstanding encumbrances and liens, for the transfer value of
membership interests or shares, for use for a public or charitable
purpose.
(e) Amendment of the bylaws and articles of incorporation requires
the affirmative vote of at least two-thirds of the resident-owner
members or shareholders.
817.1. (a) A "workforce housing cooperative trust" is an entity
organized pursuant to this section that complies with Section 817 and
with all of the following:
(1) Allows the governing board to be composed of two classes of
board members. One class is elected by the residents, and one class
is appointed by sponsor organizations, including employer and
employee organizations, chambers of commerce, government entities,
unions, religious organizations, nonprofit organizations, cooperative
organizations, and other forms of organizations. Resident members
shall elect a majority of the board members. However, sponsor
organizations may appoint up to one less than a majority of the board
members. The numerical composition and class of the sponsor and
resident board members shall be set in the articles of incorporation
and in the bylaws.
(2) Requires the charter board of a workforce housing cooperative
trust to be composed of only sponsor board members, to remain in
place for one year after the first resident occupancy. One year after
the first resident occupancy, the resident members shall elect a
single board member. Three years after the first resident occupancy,
resident members shall elect a majority of the board members.
(3) Prohibits the removal of the appointees of sponsor
organizations, except for cause.
(4) Allows for the issuance of separate classes of shares to
sponsor organizations or support organizations. These shares shall be
denominated as "workforce housing shares" and shall receive a rate
of return of no more than 10 percent simple interest pursuant to
subparagraph (C) of paragraph (1) of subdivision (b) of Section 817.
(5) Requires, in order to amend the bylaws or articles of
incorporation of a workforce housing cooperative trust, the
affirmative vote of at least a majority of the resident-owner members
or shareholders and a majority of each class of board members. The
rights of the sponsor board members or the sponsors shall not be
changed without the affirmative vote of two-thirds of the sponsor
board members.
(b) A workforce housing cooperative trust shall be entitled to
operate at multiple locations in order to sponsor limited-equity
housing cooperatives. A workforce housing cooperative trust may
either own or lease land for the purpose of developing limited-equity
housing cooperatives.
(c) A workforce housing cooperative trust may be created when at
least 51 percent of the occupied units in a multifamily property that
is in foreclosure support efforts to buy the building or property.
817.2. The procedure for the dissolution of a limited-equity
housing cooperative or workforce housing cooperative trust that
receives or has received a public subsidy shall be as follows:
(a) A public hearing, conducted by the county in which the
limited-equity housing cooperative or workforce housing cooperative
trust is located, shall be held. The cooperative or trust shall pay
for all costs associated with the public hearing.
(b) The county shall provide notice to all interested parties. The
notice shall be given at least 120 days prior to the date of the
hearing. The county shall obtain a list of all other limited-equity
housing cooperatives and cooperative development organizations in the
state from the California Center for Cooperative Development, if it
exists, and provide notice to all of the entities on the list in an
effort to create a merger with an existing limited-equity housing
cooperative or workforce housing cooperative trust. The notice shall
be mailed first-class, postage prepaid, in the United States mail.
(c) If the dissolving limited-equity housing cooperative or
workforce housing cooperative trust merges with an existing
cooperative or trust, to the extent possible, the merger shall be
with the geographically closest cooperative or trust.
(d) If the dissolving limited-equity housing cooperative or
workforce housing cooperative trust does not merge with an existing
cooperative or trust, both of the following shall occur:
(1) Upon completion of the public hearing required pursuant to
subdivision (a), the county shall adopt a resolution approving of the
dissolution and make a finding that the dissolution plan is free of
private inurement, and meets the requirements of state and federal
law.
(2) Any dissolved housing units held by the limited-equity housing
cooperative or workforce housing cooperative trust shall be made
available through a public lottery supervised by the county in which
the cooperative or trust is located.
(e) The members of the board of directors shall not arrange to
occupy units in fee simple or as a rental as an outcome of the
dissolution of the limited-equity housing cooperative or workforce
housing cooperative.
817.3. Each entity named as a sponsor organization of a workforce
housing cooperative trust formed pursuant to Section 817 shall have
the legal standing of a member unless it revokes, in writing, its
sponsorship.
817.4. (a) In any action instituted against a board of directors
and its members based upon a breach of corporate or fiduciary duties
or a failure to comply with the requirements of this chapter, a
prevailing plaintiff may recover reasonable attorney's fees and
costs. If the court determines, by clear and convincing evidence,
that the breach or failure to comply was willful, the court, in its
discretion, may award punitive damages in addition to any other
amounts.
(b) If an organization formed under this chapter uses public
funds, it shall not use any corporate funds to avoid compliance with
this chapter or to pursue dissolution if the intent or outcome is for
some or all of the members to occupy those units upon dissolution.
SEC. 3. Section 1351 of the Civil Code
is amended to read:
1351. As used in this title, the following terms have the
following meanings:
(a) "Association" means a nonprofit corporation or unincorporated
association created for the purpose of managing a common interest
development.
(b) "Common area" means the entire common interest development
except the separate interests therein. The estate in the common area
may be a fee, a life estate, an estate for years, or any combination
of the foregoing. However, the common area for a planned development
specified in paragraph (2) of subdivision (k) may consist of mutual
or reciprocal easement rights appurtenant to the separate interests.
(c) "Common interest development" means any of the following:
(1) A community apartment project.
(2) A condominium project.
(3) A planned development.
(4) A stock cooperative.
(d) "Community apartment project" means a development in which an
undivided interest in land is coupled with the right of exclusive
occupancy of any apartment located thereon.
(e) "Condominium plan" means a plan consisting of (1) a
description or survey map of a condominium project, which shall refer
to or show monumentation on the ground, (2) a three-dimensional
description of a condominium project, one or more dimensions of which
may extend for an indefinite distance upwards or downwards, in
sufficient detail to identify the common areas and each separate
interest, and (3) a certificate consenting to the recordation of the
condominium plan pursuant to this title signed and acknowledged by
the following:
(A) The record owner of fee title to that property included in the
condominium project.
(B) In the case of a condominium project which will terminate upon
the termination of an estate for years, the certificate shall be
signed and acknowledged by all lessors and lessees of the estate for
years.
(C) In the case of a condominium project subject to a life estate,
the certificate shall be signed and acknowledged by all life tenants
and remainder interests.
(D) The certificate shall also be signed and acknowledged by
either the trustee or the beneficiary of each recorded deed of trust,
and the mortgagee of each recorded mortgage encumbering the
property.
Owners of mineral rights, easements, rights-of-way, and other
nonpossessory interests do not need to sign the condominium plan.
Further, in the event a conversion to condominiums of a community
apartment project or stock cooperative has been approved by the
required number of owners, trustees, beneficiaries, and mortgagees
pursuant to Section 66452.10 of the Government Code, the certificate
need only be signed by those owners, trustees, beneficiaries, and
mortgagees approving the conversion.
A condominium plan may be amended or revoked by a subsequently
acknowledged recorded instrument executed by all the persons whose
signatures would be required pursuant to this subdivision.
(f) A "condominium project" means a development consisting of
condominiums. A condominium consists of an undivided interest in
common in a portion of real property coupled with a separate interest
in space called a unit, the boundaries of which are described on a
recorded final map, parcel map, or condominium plan in sufficient
detail to locate all boundaries thereof. The area within these
boundaries may be filled with air, earth, or water, or any
combination thereof, and need not be physically attached to land
except by easements for access and, if necessary, support. The
description of the unit may refer to (1) boundaries described in the
recorded final map, parcel map, or condominium plan, (2) physical
boundaries, either in existence, or to be constructed, such as walls,
floors, and ceilings of a structure or any portion thereof, (3) an
entire structure containing one or more units, or (4) any combination
thereof. The portion or portions of the real property held in
undivided interest may be all of the real property, except for the
separate interests, or may include a particular three-dimensional
portion thereof, the boundaries of which are described on a recorded
final map, parcel map, or condominium plan. The area within these
boundaries may be filled with air, earth, or water, or any
combination thereof, and need not be physically attached to land
except by easements for access and, if necessary, support. An
individual condominium within a condominium project may include, in
addition, a separate interest in other portions of the real property.
(g) "Declarant" means the person or group of persons designated in
the declaration as declarant, or if no declarant is designated, the
person or group of persons who sign the original declaration or who
succeed to special rights, preferences, or privileges designated in
the declaration as belonging to the signator of the original
declaration.
(h) "Declaration" means the document, however denominated, which
contains the information required by Section 1353.
(i) "Exclusive use common area" means a portion of the common
areas designated by the declaration for the exclusive use of one or
more, but fewer than all, of the owners of the separate interests and
which is or will be appurtenant to the separate interest or
interests.
(1) Unless the declaration otherwise provides, any shutters,
awnings, window boxes, doorsteps, stoops, porches, balconies, patios,
exterior doors, doorframes, and hardware incident thereto, screens
and windows or other fixtures designed to serve a single separate
interest, but located outside the boundaries of the separate
interest, are exclusive use common areas allocated exclusively to
that separate interest.
(2) Notwithstanding the provisions of the declaration, internal
and external telephone wiring designed to serve a single separate
interest, but located outside the boundaries of the separate
interest, are exclusive use common areas allocated exclusively to
that separate interest.
(j) "Governing documents" means the declaration and any other
documents, such as bylaws, operating rules of the association,
articles of incorporation, or articles of association, which govern
the operation of the common interest development or association.
(k) "Planned development" means a development (other than a
community apartment project, a condominium project, or a stock
cooperative) having either or both of the following features:
(1) The common area is owned either by an association or in common
by the owners of the separate interests who possess appurtenant
rights to the beneficial use and enjoyment of the common area.
(2) A power exists in the association to enforce an obligation of
an owner of a separate interest with respect to the beneficial use
and enjoyment of the common area by means of an assessment which may
become a lien upon the separate interests in accordance with Section
1367 or 1367.1.
() "Separate interest" has the following meanings:
(1) In a community apartment project, "separate interest" means
the exclusive right to occupy an apartment, as specified in
subdivision (d).
(2) In a condominium project, "separate interest" means an
individual unit, as specified in subdivision (f).
(3) In a planned development, "separate interest" means a
separately owned lot, parcel, area, or space.
(4) In a stock cooperative, "separate interest" means the
exclusive right to occupy a portion of the real property, as
specified in subdivision (m).
Unless the declaration or condominium plan, if any exists,
otherwise provides, if walls, floors, or ceilings are designated as
boundaries of a separate interest, the interior surfaces of the
perimeter walls, floors, ceilings, windows, doors, and outlets
located within the separate interest are part of the separate
interest and any other portions of the walls, floors, or ceilings are
part of the common areas.
The estate in a separate interest may be a fee, a life estate, an
estate for years, or any combination of the foregoing.
(m) "Stock cooperative" means a development in which a corporation
is formed or availed of, primarily for the purpose of holding title
to, either in fee simple or for a term of years, improved real
property, and all or substantially all of the shareholders of the
corporation receive a right of exclusive occupancy in a portion of
the real property, title to which is held by the corporation. The
owners' interest in the corporation, whether evidenced by a share of
stock, a certificate of membership, or otherwise, shall be deemed to
be an interest in a common interest development and a real estate
development for purposes of subdivision (f) of Section 25100 of the
Corporations Code.
A "stock cooperative" includes a limited equity housing
cooperative which is a stock cooperative that meets the criteria of
Section 33007.5 of the Health and Safety Code
817 .
SEC. 4. Section 33007.5 of the Health
and Safety Code is repealed.
33007.5. "Limited-equity housing cooperative" means a corporation
organized on a cooperative basis which meets all of the following
requirements:
(a) The corporation is any of the following:
(1) Organized as a nonprofit public benefit corporation pursuant
to Part 2 (commencing with Section 5110) of Division 2 of Title 1 of
the Corporations Code.
(2) Holds title to real property as the beneficiary of a trust
providing for distribution for public or charitable purposes upon
termination of the trust.
(3) Holds title to real property subject to conditions which will
result in reversion to a public or charitable entity upon
dissolution of the corporation.
(4) Holds a leasehold interest, of at least 20 years' duration,
conditioned on the corporation's continued qualification under this
section, and providing for reversion to a public entity or charitable
corporation.
(b) The articles of incorporation or bylaws require the purchase
and sale of the stock or membership interest of resident owners who
cease to be permanent residents, at no more than a transfer value
determined as provided in the articles or bylaws, and which shall not
exceed the aggregate of the following:
(1) The consideration paid for the membership or shares by the
first occupant of the unit involved, as shown on the books of the
corporation.
(2) The value, as determined by the board of directors of the
corporation, of any improvements installed at the expense of the
member with the prior approval of the board of directors.
(3) Accumulated interest, or an inflation allowance at a rate
which may be based on a cost-of-living index, an income index, or
market-interest index. Any increment pursuant to this paragraph shall
not exceed a 10 percent annual increase on the consideration paid
for the membership or share by the first occupant of the unit
involved.
(c) The articles of incorporation or bylaws require the board of
directors to sell the stock or membership interest purchased as
provided in subdivision (b), to new member-occupants or resident
shareholders at a price which does not exceed the "transfer value"
paid for the unit.
(d) The "corporate equity," which is defined as the excess of the
current fair marketed value of the corporation's real property over
the sum of the current transfer values of all shares or membership
interests, reduced by the principal balance of outstanding
encumbrances upon the corporate real property as a whole, shall be
applied as follows:
(1) So long as any such encumbrance remains outstanding, the
corporate equity shall not be used for distribution to members, but
only for the following purposes, and only to the extent authorized by
the board, subject to the provisions and limitations of the articles
of incorporation and bylaws:
(A) For the benefit of the corporation or the improvement of the
real property.
(B) For expansion of the corporation by acquisition of additional
real property.
(C) For public benefit or charitable purposes.
(2) Upon sale of the property, dissolution of the corporation, or
occurrence of a condition requiring termination of the trust or
reversion of title to the real property, the corporate equity is
required by the articles, bylaws, or trust or title conditions to be
paid out, or title to the property transferred, subject to
outstanding encumbrances and liens, for the transfer value of
membership interests or shares, for use for a public or charitable
purpose.
(e) Amendment of the bylaws and articles of incorporation
requires the affirmative vote of at least two-thirds of the
resident-owner members or shareholders.
SEC. 5. Section 33413.7 of the Health
and Safety Code is amended to read:
33413.7. An agency causing the rehabilitation, development, or
construction of replacement dwelling units, other than single-family
residences, pursuant to Section 33413 or Section 33464, or pursuant
to a replacement housing plan as required by Section 33413.5, or
pursuant to provisions of a redevelopment plan required by Section
33334.5, primarily for persons of low income, as defined in Section
50093, shall give preference to those developments which
that are proposed to be organized as
limited-equity housing cooperatives, when so requested by a project
area committee established pursuant to Section 33385, provided
such the project is achievable in an
efficient and timely manner.
Such
The limited-equity housing cooperatives shall, in
addition to the provisions of Section 33007.5
817 of the Civil Code , be organized so that the consideration
paid for memberships or shares by the first occupants following
construction or acquisition by the corporation, including the
principal amount of obligations incurred to finance the share or
membership purchase, does not exceed 3 percent of the development
cost or acquisition cost, or of the fair market value appraisal by
the permanent lender, whichever is greater.
SEC. 6. Section 50073 of the Health and
Safety Code is amended to read:
50073. "Housing development",
development," for the purpose of housing assisted by the
department, means any work or undertaking of new construction or
rehabilitation, or the acquisition of existing residential structures
in good condition, for the provision of housing which
that is financed pursuant to the provisions of
this division for the primary purpose of providing decent, safe, and
sanitary housing for persons and families of low or moderate income.
"Housing development" also means housing financed pursuant to this
part for rental occupancy of, for resale to, or sold to, persons and
families of low or moderate income. Notwithstanding other provisions
of this section, "housing development" does not include a work or
undertaking financed by a neighborhood improvement loan. A housing
development may include housing for other economic groups as part of
an overall plan to develop new or rehabilitated communities or
neighborhoods, where housing for persons and families of low or
moderate income is a primary goal. A housing development may include
any buildings, land, equipment, facilities, or other real or personal
property which that the agency
determines pursuant to its rules and regulations to be necessary or
convenient in connection with the provision of housing pursuant to
this division, including, but not limited to, streets, sewers,
utilities, parks, site preparation, landscaping, and other nonhousing
facilities, such as administrative, community, health, recreational,
educational, commercial facilities, and child-care facilities
which that the agency determines are an
integral part of a housing development or developments.
"Housing development" includes the acquisition of a residential
structure by a nonprofit housing sponsor, whether or not including
rehabilitation, for the purpose of forming a limited-equity housing
cooperative as defined in Section 33007.5 817
of the Civil Code . All matter omitted in this version of the
bill appears in the bill as amended in the Assembly, May 5, 2009
(JR11)