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	<ns0:Description>
		<ns0:Id>20250SB__042394AMD</ns0:Id>
		<ns0:VersionNum>94</ns0:VersionNum>
		<ns0:History>
			<ns0:Action>
				<ns0:ActionText>INTRODUCED</ns0:ActionText>
				<ns0:ActionDate>2025-02-18</ns0:ActionDate>
			</ns0:Action>
			<ns0:Action>
				<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
				<ns0:ActionDate>2025-03-26</ns0:ActionDate>
			</ns0:Action>
			<ns0:Action>
				<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
				<ns0:ActionDate>2025-05-05</ns0:ActionDate>
			</ns0:Action>
			<ns0:Action>
				<ns0:ActionText>AMENDED_SENATE</ns0:ActionText>
				<ns0:ActionDate>2025-05-23</ns0:ActionDate>
			</ns0:Action>
			<ns0:Action>
				<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
				<ns0:ActionDate>2025-09-02</ns0:ActionDate>
			</ns0:Action>
			<ns0:Action>
				<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
				<ns0:ActionDate>2025-09-09</ns0:ActionDate>
			</ns0:Action>
		</ns0:History>
		<ns0:LegislativeInfo>
			<ns0:SessionYear>2025</ns0:SessionYear>
			<ns0:SessionNum>0</ns0:SessionNum>
			<ns0:MeasureType>SB</ns0:MeasureType>
			<ns0:MeasureNum>423</ns0:MeasureNum>
			<ns0:MeasureState>AMD</ns0:MeasureState>
		</ns0:LegislativeInfo>
		<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Gonzalez</ns0:AuthorText>
		<ns0:AuthorText authorType="PRINCIPAL_COAUTHOR_OPPOSITE">(Principal coauthor: Assembly Member McKinnor)</ns0:AuthorText>
		<ns0:Authors>
			<ns0:Legislator>
				<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
				<ns0:House>SENATE</ns0:House>
				<ns0:Name>Gonzalez</ns0:Name>
			</ns0:Legislator>
			<ns0:Legislator>
				<ns0:Contribution>PRINCIPAL_COAUTHOR</ns0:Contribution>
				<ns0:House>ASSEMBLY</ns0:House>
				<ns0:Name>McKinnor</ns0:Name>
			</ns0:Legislator>
		</ns0:Authors>
		<ns0:Title>An act to add Chapter 12 (commencing with Section 50360) to Part 1 of Division 31 of the Health and Safety Code, and to add Section 11914 to the Revenue and Taxation Code, relating to housing.</ns0:Title>
		<ns0:RelatingClause>housing</ns0:RelatingClause>
		<ns0:GeneralSubject>
			<ns0:Subject>Housing: real property transfer taxes: affordability covenants.</ns0:Subject>
		</ns0:GeneralSubject>
		<ns0:DigestText>
			<html:p>
				(1)
				<html:span class="EnSpace"/>
				Existing law, the Zenovich-Moscone-Chacon Housing and Home Finance Act, among other things, establishes the Department of Housing and Community Development and requires it to administer various programs intended to promote the development of housing and to provide housing assistance and home loans. 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. Existing law creates the California Housing Finance Agency within the Business, Consumer Services, and Housing Agency and authorizes the agency to make loans to finance affordable
			 housing.
			</html:p>
			<html:p>This bill would allow a state or local agency administering an affordable housing program to enter into or modify a provision of a regulatory agreement regarding curing an event of default, if prescribed conditions apply. The bill would exempt a regulatory agreement entered into or altered pursuant to its provisions from any conflicting land use restriction, declaration of restrictive covenants, deed restriction, or similar instrument, as provided. The bill would specify that its provisions are not to be construed to supersede any other law governing the foreclosure of deeds of trust or mortgages and the extinguishment of junior interests.</html:p>
			<html:p>The bill would include findings that these changes proposed by this bill address a matter of statewide concern rather than a municipal affair and,
			 therefore, apply to all cities, including charter cities.</html:p>
			<html:p>
				(2)
				<html:span class="EnSpace"/>
				Existing statutory law, enacted by Proposition 62, as approved by the voters at the November 4, 1986, statewide general election, prohibits a local government or district from imposing any transaction tax or sales tax on the sale of real property within the city, county, or district, except as provided. The California Constitution authorizes cities organized under a charter to make and enforce all ordinances and regulations with respect to municipal affairs, which supersede inconsistent general laws. Existing law, the Documentary Transfer Tax Act, authorizes the imposition of a tax by a county or city, as provided, with respect to specified instruments that transfer specified interests in real property.
			</html:p>
			<html:p>This bill would prohibit the City of Los Angeles from imposing a documentary transfer tax greater than a specified rate on a
			 deed, instrument, or writing that conveys real property that was issued its first certificate of occupancy within the previous 15 years, except as provided. The bill would authorize the City of Los Angeles to impose a documentary transfer tax at greater than a specified rate on a deed, instrument, or writing that conveys real property unless the real property is a single-family housing property, as defined, and meets specified conditions, including that the dwelling unit on the single-family housing property was destroyed by a disaster that resulted in a declared local emergency. The bill would make these provisions operative on a specified date, but only if certain conditions are satisfied, as provided.</html:p>
			<html:p>This bill would make legislative findings and declarations as to the necessity of a special statute for the City of Los Angeles.</html:p>
		</ns0:DigestText>
		<ns0:DigestKey>
			<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
			<ns0:Appropriation>NO</ns0:Appropriation>
			<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
			<ns0:LocalProgram>NO</ns0:LocalProgram>
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			<ns0:ImmediateEffect>NO</ns0:ImmediateEffect>
			<ns0:ImmediateEffectFlags>
				<ns0:Urgency>NO</ns0:Urgency>
				<ns0:TaxLevy>NO</ns0:TaxLevy>
				<ns0:Election>NO</ns0:Election>
				<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
				<ns0:BudgetBill>NO</ns0:BudgetBill>
				<ns0:Prop25TrailerBill>NO</ns0:Prop25TrailerBill>
			</ns0:ImmediateEffectFlags>
		</ns0:MeasureIndicators>
	</ns0:Description>
	<ns0:Bill id="bill">
		<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
		<ns0:BillSection id="id_AD696A16-C047-4A7E-8F5A-9DAA214768F2">
			<ns0:Num>SECTION 1.</ns0:Num>
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				Chapter 12 (commencing with Section 50360) is added to Part 1 of Division 31 of the 
				<ns0:DocName>Health and Safety Code</ns0:DocName>
				, to read:
			</ns0:ActionLine>
			<ns0:Fragment>
				<ns0:LawHeading id="id_4268F828-CCD0-4522-904B-3AC58C991A94" type="CHAPTER">
					<ns0:Num>12.</ns0:Num>
					<ns0:LawHeadingVersion id="id_8B6B8370-FBEE-49C8-A112-B7BD32AE2296">
						<ns0:LawHeadingText>Affordable Housing Covenant Flexibility</ns0:LawHeadingText>
					</ns0:LawHeadingVersion>
					<ns0:LawSection id="id_6F3CC9BC-83F2-4F94-80BB-FEDDC8A5A613">
						<ns0:Num>50360.</ns0:Num>
						<ns0:LawSectionVersion id="id_FBF36323-5827-4A8D-9BE4-B85FA160C16A">
							<ns0:Content>
								<html:p>For purposes of this chapter:</html:p>
								<html:p>
									(a)
									<html:span class="EnSpace"/>
									“Affordable housing program” means any program the purpose of which is to finance the acquisition, development, rehabilitation, preservation, or operation of housing affordable to households at lower or moderate incomes, as defined in Sections 50079.5 and 50093.
								</html:p>
								<html:p>
									(b)
									<html:span class="EnSpace"/>
									“First lien capital” means any loan or investment, secured by a first lien deed of trust on the property, and underwritten on the basis of repayment from project revenues. First lien capital does not include any loan or investment whose repayment is contingent upon or deferred or limited to surplus cash, residual receipts, or similar arrangements.
								</html:p>
								<html:p>
									(c)
									<html:span class="EnSpace"/>
									“Event of default” means the occurrence of any event that constitutes a defined event of default under an agreement for a loan or related security agreement or guarantee secured by the property.
								</html:p>
								<html:p>
									(d)
									<html:span class="EnSpace"/>
									“Regulatory agreement” means an agreement with a governmental agency for the purposes of any governmental program, which obligates the project sponsor to maintain the affordability of the assisted housing development for households at lower or moderate incomes, as defined in Sections 50079.5 and 50093.
								</html:p>
							</ns0:Content>
						</ns0:LawSectionVersion>
					</ns0:LawSection>
					<ns0:LawSection id="id_A5B2BA97-631D-407B-A7D3-A43A51A74F5C">
						<ns0:Num>50361.</ns0:Num>
						<ns0:LawSectionVersion id="id_2AF2244C-52DB-4CAF-9EE3-671DFF07D6E9">
							<ns0:Content>
								<html:p>
									(a)
									<html:span class="EnSpace"/>
									Notwithstanding any other law, except as provided in Section 50362, a local agency administering an affordable housing program may enter into a regulatory agreement containing a provision regarding curing an event of default or, with the consent of the project sponsor, waive, modify, amend, or delete a provision of a regulatory agreement within the control of the agency regarding curing an event of default, if all of the following conditions apply:
								</html:p>
								<html:p>
									(1)
									<html:span class="EnSpace"/>
									The provision regarding curing an event of default relates to any of the following:
								</html:p>
								<html:p>
									(A)
									<html:span class="EnSpace"/>
									Subordination to first lien capital.
								</html:p>
								<html:p>
									(B)
									<html:span class="EnSpace"/>
									Resale restrictions to
						  specified entities that may be modified so long as entities identified in subdivision (d) of Section 65863.11 of the Government Code are given the opportunity to submit an offer to purchase the development.
								</html:p>
								<html:p>
									(C)
									<html:span class="EnSpace"/>
									Income or rent limits.
								</html:p>
								<html:p>
									(D)
									<html:span class="EnSpace"/>
									Target population or set-aside requirements.
								</html:p>
								<html:p>
									(E)
									<html:span class="EnSpace"/>
									Term of a regulatory restriction period that exceeds 55 years.
								</html:p>
								<html:p>
									(2)
									<html:span class="EnSpace"/>
									Rents for an affordable housing project subject to the regulatory agreement shall not exceed an affordable rent for lower income households set in an amount consistent with the rent limits established by the California Tax Credit Allocation Committee.
								</html:p>
								<html:p>
									(3)
									<html:span class="EnSpace"/>
									The term of the regulatory restriction amended pursuant to subparagraph (E) of paragraph
						  (1) shall not be less than 55 years from the initial recording date.
								</html:p>
								<html:p>
									(b)
									<html:span class="EnSpace"/>
									An affordable housing project with a regulatory agreement entered into or altered under subdivision (a) shall be exempt from any land use restriction, declaration of restrictive covenants, deed restriction, or similar instrument that conflicts with any provision entered into or altered pursuant to subdivision (a), excepting any such instruments recorded by any state agency or to which any state agency is a party.
								</html:p>
							</ns0:Content>
						</ns0:LawSectionVersion>
					</ns0:LawSection>
					<ns0:LawSection id="id_B3F9CD16-009D-4592-92CE-C051133B1157">
						<ns0:Num>50362.</ns0:Num>
						<ns0:LawSectionVersion id="id_35875A8D-C003-405F-9CC3-396BE0CC2D93">
							<ns0:Content>
								<html:p>Nothing in this chapter shall be construed to supersede any other law governing the foreclosure of deeds of trust or mortgages and the extinguishment of junior interests, including, but not limited to, Sections 2910 to 2924, inclusive, of the Civil Code.</html:p>
							</ns0:Content>
						</ns0:LawSectionVersion>
					</ns0:LawSection>
					<ns0:LawSection id="id_A066A069-0988-455A-BD65-5C73A5A90A37">
						<ns0:Num>50363.</ns0:Num>
						<ns0:LawSectionVersion id="id_A6ED1DAC-7C52-4D4C-A0D2-F4A0C512B4DC">
							<ns0:Content>
								<html:p>The Legislature finds and declares that allowing local agencies additional flexibility to cure defaults in affordable housing projects, including through new regulatory agreements that conditionally confer such authority only in the event of default, is necessary to preserve affordability, protect tenants, keep projects viable, and ensure that public and other soft funds are placed effectively and efficiently.</html:p>
							</ns0:Content>
						</ns0:LawSectionVersion>
					</ns0:LawSection>
					<ns0:LawSection id="id_B6FE8D48-79B4-4E62-BA39-60EEA37CDC72">
						<ns0:Num>50364.</ns0:Num>
						<ns0:LawSectionVersion id="id_D4F00CC1-BD54-4CCC-9F43-09580E33874E">
							<ns0:Content>
								<html:p>The Legislature finds and declares that the preservation of affordable housing, in light of the severe shortage of affordable housing in this state, is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, this chapter applies to all cities, including charter cities.</html:p>
							</ns0:Content>
						</ns0:LawSectionVersion>
					</ns0:LawSection>
				</ns0:LawHeading>
			</ns0:Fragment>
		</ns0:BillSection>
		<ns0:BillSection id="id_44EAE8C5-1A69-4F95-8507-700F3446BC1D">
			<ns0:Num>SEC. 2.</ns0:Num>
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				Section 11914 is added to the 
				<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
				, to read:
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			<ns0:Fragment>
				<ns0:LawSection id="id_649E6A94-31B9-4772-B47A-C39B9F685815">
					<ns0:Num>11914.</ns0:Num>
					<ns0:LawSectionVersion id="id_AC98874E-22D5-4264-898D-0E71FBE857D2">
						<ns0:Content>
							<html:p>
								(a)
								<html:span class="EnSpace"/>
								The City of Los Angeles shall not impose a documentary transfer tax greater than the rate of seven dollars and fifty cents ($7.50) for five hundred dollars ($500) in consideration or value of the interest or property, or fractional part thereof, conveyed on a deed, instrument, or writing that conveys real property that has been issued its first certificate of occupancy within the previous 15 years.
							</html:p>
							<html:p>
								(b)
								<html:span class="EnSpace"/>
								Notwithstanding subdivision (a), the City of Los Angeles may impose a documentary transfer tax greater than the rate of seven dollars and fifty cents ($7.50) for five hundred dollars ($500) in consideration or value of the interest or property, or fractional part thereof, conveyed on each deed, instrument, or writing that conveys real
						property for a building receiving its entitlement after the operative date of this section if both of the following conditions are met:
							</html:p>
							<html:p>
								(1)
								<html:span class="EnSpace"/>
								The building is over 85 feet in height above grade.
							</html:p>
							<html:p>
								(2)
								<html:span class="EnSpace"/>
								The construction of the building did not meet the labor standards of paragraph (8) of subdivision (a) of Section 65913.4 of the Government Code.
							</html:p>
							<html:p>
								(c)
								<html:span class="EnSpace"/>
								Notwithstanding subdivision (a), the City of Los Angeles may impose a documentary transfer tax greater than the rate of seven dollars and fifty cents ($7.50) for five hundred dollars ($500) in consideration or value of the interest or property, or fractional part thereof, conveyed on a deed, instrument, or writing, unless the real property is a single-family property and both of the following conditions are true:
							</html:p>
							<html:p>
								(1)
								<html:span class="EnSpace"/>
								The dwelling unit on the single-family housing property was destroyed by a disaster that resulted in a declared local emergency.
							</html:p>
							<html:p>
								(2)
								<html:span class="EnSpace"/>
								The single-family housing property was issued a certificate of occupancy on a date that is both of the following:
							</html:p>
							<html:p>
								(A)
								<html:span class="EnSpace"/>
								Within the previous five years.
							</html:p>
							<html:p>
								(B)
								<html:span class="EnSpace"/>
								After the declared local emergency described in paragraph (1).
							</html:p>
							<html:p>
								(d)
								<html:span class="EnSpace"/>
								For purposes of this section, “single-family housing property” means a property containing a single dwelling unit that is not an accessory dwelling unit or junior accessory dwelling unit, as those terms are defined in Section 66313 of the Government Code.
							</html:p>
						</ns0:Content>
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				</ns0:LawSection>
			</ns0:Fragment>
		</ns0:BillSection>
		<ns0:BillSection id="id_8D42A976-93FA-4F75-8A4A-ECEECC13A84C">
			<ns0:Num>SEC. 3.</ns0:Num>
			<ns0:Content>
				<html:p>The Legislature finds and declares that, with respect to Section 2 of this act, a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique circumstances relating to the imposition of documentary transfer taxes in the City of Los Angeles.</html:p>
			</ns0:Content>
		</ns0:BillSection>
		<ns0:BillSection id="id_1CC73973-67D5-48FF-97A5-7E4A8DF0CA80">
			<ns0:Num>SEC. 4.</ns0:Num>
			<ns0:Content>
				<html:p>
					(a)
					<html:span class="EnSpace"/>
					Section 2 of this act, adding Section 11914 to the Revenue and Taxation Code, shall become operative on the applicable of the following dates, but only if the relevant conditions are met:
				</html:p>
				<html:p>
					(1)
					<html:span class="EnSpace"/>
					On January 1, 2026, if, as of that date, Initiative 25-0004A1, Initiative 25-0005A1, and Initiative 25-0006A1 have each been withdrawn by their respective proponents.
				</html:p>
				<html:p>
					(2)
					<html:span class="EnSpace"/>
					On the 39th day, excluding Saturdays, Sundays, and holidays, after February 25, 2026, if, as of that
				date, Initiative 25-0004A1, Initiative 25-0005A1, and Initiative 25-0006A1 have each failed to qualify to appear on the ballot for the November 3, 2026, statewide general election.
				</html:p>
				<html:p>
					(b)
					<html:span class="EnSpace"/>
					If neither of the conditions described in subdivision (a) are satisfied, Section 2 of this act shall not become operative.
				</html:p>
			</ns0:Content>
		</ns0:BillSection>
	</ns0:Bill>
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