BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 97|
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THIRD READING
Bill No: AB 97
Author: Torlakson (D), et al
Amended: 9/3/99 in Senate
Vote: 21
SENATE HOUSING & COMM. DEV. COMMITTEE : 5-0, 7/12/99
AYES: Alarcon, Bowen, Costa, Escutia, Vasconcellos
NOT VOTING: Johannessen, Monteith
SENATE APPROPRIATIONS COMMITTEE : 13-0, 9/1/99
AYES: Johnston, Alpert, Bowen, Burton, Escutia, Johnson,
Karnette, Kelley, Leslie, McPherson, Mountjoy, Perata,
Vasconcellos
ASSEMBLY FLOOR : 79-0, 5/28/99 - See last page for vote
SUBJECT : Taxation: low-income housing
SOURCE : Author
DIGEST : This bill deletes the January 1, 2000 sunset
date for California's low-income housing credit program and
extends the program for as long as the federal low income
housing tax credit program remains in effect.
Senate Floor Amendments of 9/3/99 reduce the annual housing
tax credit limit to $35 million by deleting the provisions
which would have established an annual tax credit limit of
$50 million.
ANALYSIS : The federal Tax Reform Act of 1986 and the
CONTINUED
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Reconciliation Act of 1989 created low-income housing tax
credits to stimulate the production and rehabilitation of
affordable housing. The federal tax credit is limited in
each state to $1.25 per capita per year. California's 1998
tax credit allocation was approximately $50 million.
California enacted a similar state low income housing tax
credit program to augment the federal tax credit program
(AB 53, Klehs, 1987). The state tax credit is only
available to projects that receive federal tax credits; it
supplements the federal tax credit program. The state tax
credit is limited to $1.25 per capita but it cannot exceed
$50 million (previously $35 million) per year.
The California Tax Credit Allocation Committee (TCAC)
administers both the state and federal low income tax
credit programs. Based on a competitive application
process, TCAC allocates the tax credits to housing
developers who then sell the credits to investors to raise
capital to build affordable housing units. Investors
typically pay 50 to 75 cents for each dollar of tax credit.
The programs have financed approximately 59,000 affordable
rental housing units, and leveraged $3 billion in
additional private and public funds.
In 1993, Congress made the federal program permanent but
the state's program sunsets on January 1, 2000. Housing
advocates want to extend the program and permanently
increase the cap.
This bill extends the state low-income housing tax credit
program for as long as the federal low income housing tax
credit program remains in effect.
Comments
Extending the Sunset . State officials and housing
advocates say that the demand for affordable housing
continues to increase but the financial resources to build
housing continues to diminish. Federal and state housing
programs have limited funding and local officials struggle
to fund housing and other local services. The state's low
income housing tax credit program is one of the remaining
resources for affordable housing but it is schedule to
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expire at the end of the year. This bill extends an
important funding source and will continue to help meet the
increasing demand for affordable housing.
Since 1987, the annual state low income housing tax credit
cap was $35 million. Responding to increasing demands for
affordable housing, the Legislature increased the cap to
$50 million for 1998 and 1999 (AB 168, Torlakson, 1998).
Each year, the demand for tax credits exceeds available tax
credits: $80 million in 1994; $124 million in 1995; $177
million in 1996; $177 million in 1997; and $134 million in
1998. Last year, the Committee received 267 applications
but only 86 (32%) received tax credits.
Based on a competitive application process, housing
developers receive an allocation of low income housing tax
credits from the Tax Credit Allocation Committee. The
developers then sell the credits to investors to raise
capital to build affordable housing units. Investors
typically pay 50 to 75 cents for each dollar of tax credit.
The state credit is claimed over a four-year period. This
bill benefits both investors and housing developers.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
Fiscal Impact (in thousands)
Major Provisions 1999-00 2000-01 2001-02
2002-03 2003-04 * Fund
Tax credit -0- -0-
$2,000 $10,000 $25,000 General
SUPPORT : (Verified 9/1/99 - Unable to reverify at time
of writing)
A Community of Friends, Los Angeles
AFL-CIO Housing Investment Trust
American Association of Retired Persons
ASIAN Incorporated, San Francisco
Bank of America
Barbara Sanders Associates, Oakland
Bonita House, Inc., Oakland
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Bowman Grove Community Service Planning, Davis
Burbank Housing Development Corporation, Santa Rosa
Cabrillo Economic Development Corporation, Saticoy
Caduceus Outreach Services, San Francisco
California Apartment Association
California Building Industry Association
California Church Impact
California Food Policy Advocates, San Francisco
California Housing Council
California Immigrant Welfare Collaborative, San Francisco
California Legislative Council for Older Americans
California Manufactured Housing Institute
California Redevelopment Association
California Reinvestment Committee, San Francisco
California Rural Legal Assistance Foundation
Catholic Charities of the Diocese of Santa Rosa
Central Valley Coalition For Affordable Housing, Merced
Chinatown Community Development Center, San Francisco
Christian Church Homes, Oakland
City of Carlsbad Housing & Redevelopment Department
City of Chico/ Homeless Task Force
City of East Palo Alto, Rent Stabilization Program
City of Los Angeles
City of Santa Barbara
Civic Center Barrio Housing Corporation, Santa Ana
Coachella Valley Housing Coalition, Indio
Community Economics, Inc., Oakland
Community Housing Development Corporation of Santa Rosa
Community Housing Development Council, Davis
Conference of Social Justice Coordinators, Los Angeles
Congress of California Seniors
Contra Costa County Homeless and Housing Service Providers
Corporation for Supportive Housing, Oakland
Council of Churches of Santa Clara County
E.M. Schaffran and Company, El Cerrito
East Bay Habitat for Humanity, Oakland
East Oakland Community Development Corporation
East Oakland Recovery Center
East Palo Alto Rent Stablization
Ecumenical Assn for Housing, San Rafael
Eden Housing, Inc., Hayward
Edison Capital
Enterprise Foundation
EPA Can Do, East Palo Alto
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Episcopal Community Services, San Francisco
Esperanza Community Housing Corporation, Los Angeles
First Community Housing, San Jose
Friends Committee on Legislation of California
Friends of the Homeless, Santa Rosa
Graphic Communications Union Retirees, Oakland
Gubb & Barshay Attorneys, San Francisco
Home Base, San Francisco
Homeless Prenatal Program, San Francisco
Homes for Life Foundation, Los Angeles
Hon. Coleen Jarvis and Hon. David Guzzetti, Chico City
Council
Honorable Dan Albert, Mayor of Monterey
Housing Authority of the City of Santa Barbara
Housing California
Housing Consortium of the East Bay, Berkeley
Housing for Independent People, Inc., San Jose
Human Assistance Inc., Newport Beach
ICF Consulting Group, San Rafael
IFSN, Santa Rosa
Jamboree Housing Corporation, Irvine
Justice Office, Sisters Of St. Joseph, Los Angeles
Katrina Bergen Associates, Oakland
Lauterbach and Associates Architects, Camarillo
League of California Cities
League of Women Voters of California
Legal Aid Foundation of Santa Barbara
Local Initiatives Support Corporation (Sponsor)
Lutheran Office of Public Policy-California
MACSA, Inc., San Jose
Marin City Community Development Corporation
Marin Continuum of Housing and Services
Marin Housing Council, San Rafael
Mary Erickson Community Housing, San Juan Capistrano
Mental Health Association of San Francisco
Mercy Charities Housing California, San Francisco
Mid Peninsula Housing Coalition, Redwood City
Mountain View/Los Altos Advocates for Affordable Housing
Napa Valley Community Housing, Napa
Nevada County Housing and Community Services
Non-Profit Housing Association of Northern California
Oakland Community Development Corporation
Oakland Community Housing Management, Inc.
Oakland Community Housing, Inc.
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Older Women's League of California
Orange County Homeless Issues Task Force
Pajara Valley Housing Corporation, Watsonville
Peace and Justice Center of Southern California, Los
Angeles
People's Self-Help Housing Corporation, San Luis Obispo
Personal Insurance Federation of California
Plowshares Peace and Justice Center, Ukiah
Public Interest Law Project, Oakland
Public Law Center, Santa Ana
Redwood City Planning and Redevelopment
Religious Witness with Homeless People, San Francisco
Renee Franken and Associates, Inc., Sacramento
Resources for Community Development, Berkeley
Richard Olmsted Architects, San Francisco
Rubicon Programs, Inc., Richmond
Rural California Housing Corporation, Sacramento
Saben Investments, Inc., Sepulveda
Sacramento Mutual Housing Association
Saint Joseph Health System, Orange
SAMCO, San Jose
San Bernardino Fair Housing Council
San Diego Association of Government
San Francisco Department of Public Health Housing Services
San Joaquin County Housing Authority
San Joaquin Fair Housing, Stockton
Santa Barbara City Council
Santa Barbara County
Santa Clara County Board of Supervisors
Santa Clara County Collaborative, San Jose
Santa Monica Rent Control Board
Santa Monicans for Renter's Rights
Self-Help Enterprises, Visalia
Senior Housing Action Collaborative, San Francisco
Sentinel Fair Housing, Oakland
Shelter Partnership, Inc., Los Angeles
Shelter, Inc., Concord
Sisters of Norte Dame de Namur of California, Saratoga
Sisters of St. Joseph of Carondelet, Los Angeles
Sisters of the Holy Names, Los Gatos
Skid Row Housing Trust, Costa Mesa
Sober Living Network, Santa Monica
Socialization Thru Empowering Peers (STEP), San Francisco
Society of St. Vincent de Paul, Council of L.A.
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Sonoma County Golden State Mobile home Owners League
South County Housing, Gilroy
Southern California Association of Non-profit Housing
Southern California Mutual Housing Association
SRO Housing Corporation, Los Angeles
State Treasurer Phil Angelides
Tenderloin Housing Clinic, San Francisco
Tenderloin Neighborhood Development Corporation, San
Francisco
Thai Community Development Center, Los Angeles
The Agora Group, Goleta
The Jordan Apartments/JSCO
The Public Interest Law Project
Thomas Lauderbach
Transitional Living and Community Support, Sacramento
Urban Counties Caucus
Venice Community Housing Corporation
Wells Fargo Bank
West Contra Costa Conservation League, El Cerrito
West Sacramento Housing Development Corporation
West Side Fair Housing Council, Los Angeles
Western Center on Law and Poverty
WNC & Associates, Inc., Costa Mesa
ASSEMBLY FLOOR :
AYES: Aanestad, Ackerman, Alquist, Aroner, Ashburn,
Baldwin, Bates, Battin, Baugh, Bock, Brewer, Briggs,
Calderon, Campbell, Cardenas, Cardoza, Cedillo, Corbett,
Correa, Cox, Cunneen, Davis, Dickerson, Ducheny, Dutra,
Firebaugh, Florez, Frusetta, Gallegos, Granlund, Havice,
Hertzberg, Honda, House, Jackson, Kaloogian, Keeley,
Knox, Kuehl, Leach, Lempert, Leonard, Longville,
Lowenthal, Machado, Maddox, Maldonado, Margett, Mazzoni,
McClintock, Migden, Nakano, Olberg, Oller, Robert
Pacheco, Rod Pacheco, Papan, Pescetti, Reyes, Romero,
Runner, Scott, Shelley, Soto, Steinberg, Strickland,
Strom-Martin, Thompson, Thomson, Torlakson, Vincent,
Washington, Wayne, Wesson, Wiggins, Wildman, Wright,
Zettel, Villaraigosa
NOT VOTING: Floyd
NC:cm 9/5/99 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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