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  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% if the development meets
specified requirements. The bill would also authorize the department
to change the current interest rate for any loan  it
originates   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.
   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 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  it originates   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.