Bill Text: CA AB523 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Department of Housing and Community Development: loans.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Passed) 2014-09-19 - Chaptered by Secretary of State - Chapter 445, Statutes of 2014. [AB523 Detail]

Download: California-2013-AB523-Amended.html

---

BILL NUMBER: AB 523	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 24, 2013

INTRODUCED BY   Assembly Members Ammiano and Brown
   (Principal coauthor: Senator Leno)

                        FEBRUARY 20, 2013

   An act to add Section 50406.7 to the Health and Safety Code,
relating to housing.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 523, as amended, Ammiano. Department of Housing and Community
Development: loans.
   Existing law authorizes the Department of Housing and Community
Development to make advance payments to eligible borrowers and
grantees under certain loan or grant programs for housing, if the
department makes specified determinations.
   This bill would additionally authorize the department to reduce
the interest rate on any loan issued by the department to a rental
housing development to as low as 0% if the development meets
specified requirements.  The bill would also authorize the
department to change the current interest rate for any loan it
originates on or after January 1, 2014, to the most recently
published applicable federal rate, as specified, and to forgive an
amount of accrued interest if the total amount of debt and accrued
interest at the end of the   loan term would be greater
after making this change than it would have been under the original
interest rate. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 50406.7 is added to the Health and Safety Code,
to read:
   50406.7.   (a)    Notwithstanding any other law,
the department  may   is authorized to 
reduce the interest rate on any loan issued by the department to a
rental housing development to as low as 0 percent if the development
meets all of the following requirements: 
   (a) 
    (1)  The development has no other debt with regularly
scheduled or amortizing debt service payments. 
   (b) 
    (2)  The development will utilize low-income housing tax
credits. 
   (c) 
    (3)  The sponsor provides evidence acceptable to the
department that demonstrates that the loan issued by the department
is not eligible to be treated as debt for federal or state low-income
housing tax credit purposes without a reduction in the interest rate
of the loan. 
   (b) The department is authorized to change the current interest
rate for any loan it originates on or after January 1, 2014, to the
applicable federal rate most recently published by the United States
Internal Revenue Service. If the total amount of debt and accrued
interest at the end of the loan term would be greater after making
this change than it would have been under the original interest rate,
the department may forgive an amount of accrued interest equal to
the lesser of either the amount necessary to make the expected
principal and accrued interest the same as it would have been using
the original interest rate, or the total amount of interest accrued
at the time of the sponsor's request.