(a) The committee shall allocate the housing credit on a regular basis consisting of two or more periods in each calendar year during which applications may be filed and considered. The committee shall establish application filing deadlines, the maximum percentage of federal and state low-income housing tax credit ceiling that may be allocated by the committee in that period, and the approximate date on which allocations shall be made. If the enactment of federal or state law, or the adoption of rules or regulations, or other similar events prevent the use of two allocation periods, the committee may reduce the number of periods and adjust the filing deadlines, maximum percentage of credit allocated, and the allocation dates.
(b) The committee shall adopt a qualified allocation plan, as provided in paragraph (1) of subsection (m) of Section 42 of Title 26 of the United States Code. In adopting this plan, the committee shall comply with the provisions of subparagraphs (B) and (C) of paragraph (1) of subsection (m) of Section 42 of Title 26 of the United States Code.
(c) In order to promote the provision of affordable low-income housing within and throughout the state, the committee shall allocate housing credits in accordance with the qualified allocation plan and regulations, which shall include the following provisions:
(1) All housing credit applicants shall demonstrate at the time the application is filed with the committee, that the project meets the following threshold requirements:
(A) The housing credit applicant shall demonstrate there is a need and demand for low-income housing in the community or region for which it is proposed.
(B) The project’s proposed financing, including tax credit proceeds, shall be sufficient to complete the project and that the proposed operating income shall be adequate to operate the project for the extended use period.
(C) The project shall have enforceable financing commitments, either construction or permanent financing, for at least 50 percent of the total estimated financing of the project.
(D) The housing credit applicant shall have and maintain control of the site for the project.
(E) The housing sponsor shall demonstrate that the project complies with all applicable local land use and zoning ordinances.
(F) The housing credit applicant shall demonstrate that the project development team has the experience and the financial capacity to ensure project completion and operation for the extended use period.
(G) The housing credit applicant shall demonstrate the amount of tax credit that is necessary for the financial feasibility of the project and its viability as a qualified low-income housing project throughout the extended use period, taking into account operating expenses, supportable debt service, reserves, funds set aside for rental subsidies, and required equity, and a development fee that does not exceed a specified percentage of the eligible basis of the project prior to inclusion of the development fee in the basis, as determined by the committee.
(2) The committee shall give a preference to those projects satisfying all of the threshold requirements of paragraph (1) if:
(A) The project serves the lowest income tenants at rents affordable to those tenants; and
(B) The project is obligated to serve qualified tenants for the longest period.
(3) In addition to the provisions of paragraphs (1) and (2) of subdivision (c), the committee shall use the following criteria in allocating housing credits:
(A) Projects serving large families in which a substantial number, as defined by the committee, of all residential units are comprised of low-income units with three and more bedrooms.
(B) Projects providing single room occupancy units serving very low income tenants.
(C) Existing projects that are “at risk of conversion,” as defined by paragraph (4) of subdivision (c) of Section 17058 of the Revenue and Taxation Code.
(D) Projects for which a public agency provides direct or indirect long-term financial support for at least 15 percent of the total project development costs or projects for which the owner’s equity constitutes at least 30 percent of the total project development costs.
(E) Projects that provide tenant amenities not generally available to residents of low-income housing projects.
(d) For purposes of allocating credits pursuant to this section, the committee shall not give preference to any project by virtue of the date of submission of its application, except to break a tie when two or more of the projects have the same rating.
(e) The committee shall allocate credits to a project under this section prior to allocating credit to that project under Sections 12206, 17058, and 23610.5 of the Revenue and Taxation Code.
(f) The committee shall allocate credits to a project only if the housing sponsor enters into a regulatory agreement that provides for an “extended use period” as defined in subparagraph (D) of paragraph (6) of subsection (h) of Section 42 of the Internal Revenue Code, which shall terminate on the date specified in the regulatory agreement or the date the project is acquired in foreclosure, including any instrument in lieu of foreclosure, whichever occurs first, and subclause (II) of subparagraph (E) of clause (i) of paragraph (6) of subsection (h) of Section 42 shall not apply.
(Amended by Stats. 1994, Ch. 1164, Sec. 31. Effective January 1, 1995. Conditionally inoperative as provided in Section 50199.18.)