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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2025-02-19</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Celeste Rodriguez</ns0:AuthorText>
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<ns0:Name>Celeste Rodriguez</ns0:Name>
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<ns0:Title> An act to add Section 50406.4 to the Health and Safety Code, relating to housing. </ns0:Title>
<ns0:RelatingClause>housing</ns0:RelatingClause>
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<ns0:Subject>Housing programs: financing.</ns0:Subject>
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<html:p>Existing law establishes the Department of Housing and Community Development and requires it to administer various programs intended to promote the development of housing, as specified, pursuant to which the department provides financial assistance in the form of deferred payment loans to pay for the eligible costs of development of specified types of housing projects. Existing law sets forth various general powers of the department in implementing these programs, including authorizing the department to enter into long-term contracts or agreements of up to 30 years for the purpose of servicing loans or grants or enforcing regulatory agreements or other security documents.</html:p>
<html:p>This bill would authorize the department to take prescribed action, including authorizing the transfer of excess reserves or excess operating income, as defined, from one rental
housing development to another rental housing development with the same owner, as specified, and waiving payment of residual receipts or minimum annual loan payments, as provided.</html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Section 50406.4 is added to the
<ns0:DocName>Health and Safety Code</ns0:DocName>
, to read:
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<ns0:Num>50406.4.</ns0:Num>
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(a)
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Notwithstanding any other law, to improve the fiscal integrity of a development financed with departmental resources, the department, in its sole discretion, may take the following action:
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(1)
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Authorize the transfer of excess reserves or excess operating income from one rental housing development, subject to a department regulatory agreement, to another rental housing development, subject to a department regulatory agreement, that is owned by the same sponsor or affiliate thereof.
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(2)
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Waive payment of residual receipts or minimum annual loan payments required under the regulatory agreement specified in paragraph (1).
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(b)
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For purposes of this section:
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(1)
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“Excess operating income” means the annual net operating income in excess of the amount that is 1.15 times the sum total of required annual debt service payments, provided that the owner can demonstrate sufficient net operating income over a 15-year period.
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(2)
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“Excess reserves” means replacement reserves, operating reserves, or transition reserves no longer required by, or in excess of the minimum amount required by, the department regulatory agreement.
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