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

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

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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

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BILL NUMBER: AB 523	AMENDED
	BILL TEXT

	AMENDED IN SENATE  SEPTEMBER 3, 2013
	AMENDED IN SENATE  JUNE 24, 2013
	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%   0.42% per
annum, or a rate determined by the department that is sufficient to
cover the costs of project monitoring, as specified,  if the
development meets specified requirements. The bill would also
authorize the department to change the current interest rate for any
loan for which it receives a loan extension request associated with
an award of federal or state low-income housing tax credits made 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.  The bill would
also authorize the department to charge a fee sufficient to cover
administrative costs associated with a loan modification requested by
a bor   rower. 
   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 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   forty-two hundredths of 1 percent (0.42%) per
annum, or a rate determined by the department that is sufficient to
cover the costs of project monitoring described in subdivision (c) of
Section 50675.6, whichever is greater,  if the development
meets all of the following requirements:
   (1) The development has no other debt with regularly scheduled or
amortizing debt service payments.
   (2) The development will utilize low-income housing tax credits.
   (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 for which it receives a loan extension request
associated with an award of federal or state low-income housing tax
credits made 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. 
   (c) The department may charge a fee in an amount sufficient to
cover administrative costs associated with a loan modification
requested by a borrower pursuant to this section.