2009 California Government Code - Section 8869.80-8869.94 :: Chapter 11.8. California Debt Limit Allocation Committee

8869.80.  The Legislature hereby finds and declares all of the
following:
   (a) The Tax Reform Act of 1986 (Public Law 99-514) establishes a
unified volume ceiling on the aggregate amount of private activity
bonds that can be issued in each state. The unified volume ceiling is
the product of seventy-five dollars ($75) multiplied by the state
population in 1987 and fifty dollars ($50) multiplied by the state
population in each succeeding calendar year.
   (b) The federal act requires each state to allocate its volume
ceiling according to a specified formula unless a different procedure
is established by Governor's proclamation or state legislation.
   (c) Therefore, it is necessary to designate a state agency and
create an allocation system to administer the state unified volume
ceiling.
   (d) A substantial public benefit is served by promoting housing
for lower income families and individuals.
   (e) A substantial public benefit is served by preserving and
rehabilitating existing governmental assisted housing for lower
income families and individuals.
   (f) A substantial public benefit is served by providing federal
tax credits or reduced interest rate mortgages to assist teachers,
principals, vice principals, assistant principals, and classified
employees who are willing to serve in high priority schools to
purchase a home.

8869.81.  This chapter is enacted to implement the state unified
volume limit established in Section 1301 of the Federal Tax Reform
Act of 1986 (Public Law 99-514) and Section 146 of the Internal
Revenue Code.

8869.82.  (a) As used in this chapter, unless the context otherwise
requires, the terms defined in this section shall have the following
meanings:
   (1) "Committee" means the California Debt Limit Allocation
Committee established pursuant to Section 8869.83.
   (2) "Fund" means the California Debt Limit Allocation Committee
Fund created pursuant to Section 8869.90.
   (3) "Internal Revenue Code" means the Internal Revenue Code of
1986 (26 U.S.C. Sec. 1 et seq.), as amended from time to time.
   (4) "Issuer" means any local agency or state agency authorized by
the Constitution or laws of the state to issue private activity
bonds.
   (5) "Local agency" means any political subdivision of the state
within the meaning of Section 103 of the Internal Revenue Code (26
U.S.C. Sec. 103), or any entity that has the power to issue private
activity bonds on behalf of that political subdivision.
   (6) "MBTCAC" means the California Tax Credit Allocation Committee
created by Section 50199.8 of the Health and Safety Code.
   (7) "Private activity bond" means a part or all of any bond, or
other instrument, required to obtain a portion of the state's volume
cap pursuant to Section 146 of the Internal Revenue Code (26 U.S.C.
Sec. 146) in order to be tax-exempt, including, generally, all of the
following, as those bonds are defined in the Internal Revenue Code:
   (A) Exempt facility bonds, except bonds for airports, docks and
wharves, and certain solid waste facilities.
   (B) Qualified mortgage bonds.
   (C) Qualified small issue bonds.
    (D) Qualified student loan bonds.
   (E) Qualified redevelopment bonds.
   (F) The nonqualified amount of an issue of governmental bonds
(including advance refunds) exceeding fifteen million dollars
($15,000,000), as provided in Section 141(b)(5) of the Internal
Revenue Code (26 U.S.C. Sec. 141(b)(5)).
   (8) "Private activity bond limit" means any portion of the state
ceiling allocated or transferred to a state agency or local agency
pursuant to this chapter.
   (9) "State" means the State of California.
   (10) "State agency" means the state and all state entities,
including joint powers authorities of which the state or agency or
instrumentality thereof is a member, empowered to issue private
activity bonds, the interest on which is exempt from income tax under
Section 103(a) of the Internal Revenue Code (26 U.S.C. Sec. 103(a)),
including nonprofit corporations described in Section 150(d) of the
Internal Revenue Code (26 U.S.C. Sec. 150(d)), authorized to issue
qualified scholarship funding bonds.
   (11) "State ceiling" includes both of the following:
   (A) The amount specified by Section 146(d) of the Internal Revenue
Code (26 U.S.C. Sec. 146(d)) for each calendar year commencing in
1986.
   (B) The amount reserved to the state pursuant to Sections 1112 and
1401 of the American Recovery and Reinvestment Act of 2009 (26
U.S.C. Secs. 54a and 1400U-1).
   (b) Pursuant to Section 146(e) of the Internal Revenue Code (26
U.S.C. Sec. 146(e)), this chapter governs the allocation of the state
ceiling among the state agencies and local agencies in this state
having authority to issue private activity bonds.
   (c) Any portion of the state ceiling allocated or transferred by
or under the authority of this chapter shall become the private
activity bond limit for the issuer of which that portion is allocated
or transferred for any private activity bonds issued by that issuer.

8869.83.  (a) There is in state government the California Debt Limit
Allocation Committee, consisting of six members as follows:
   (1) The Treasurer, or his or her designee.
   (2) The Controller, or his or her designee.
   (3) The Governor, or his or her designee.
   (4) The Director of Housing and Community Development, who shall
be a nonvoting member.
   (5) The Executive Director of the California Housing Finance
Agency, who shall be a nonvoting member.
   (6) A representative from local government who shall be a
nonvoting member, selected by two voting members of the committee.
   (b) The Treasurer shall serve as chairperson of the committee and
the office of the Treasurer shall provide an executive director and
any administrative assistance and support staff that is needed for
the committee to operate. The chairperson shall keep, or cause to be
kept, minutes and other records and documents of the committee. The
committee may, by resolution, delegate to one or more of its members,
its executive director, or any other official or employee of the
committee any powers and duties that it may deem proper, including,
but not limited to, the power to enter into contracts on behalf of
the committee.
   (c) Members of the committee shall serve without compensation.
   (d) Two voting members of the committee shall constitute a quorum.
The affirmative vote of two voting members of the committee shall be
necessary for any action taken by the committee. However, the
committee may, by unanimous vote, delegate to its chairperson the
authority to carry out any acts empowered to it under this chapter.

8869.84.  (a) The committee shall, as soon as is practicable after
the start of each calendar year, determine and announce the state
ceiling for the calendar year.
   (b) The entire state ceiling for each calendar year is hereby
allocated to the committee to further allocate to state and local
agencies as provided in this chapter.
   (c) The committee shall prepare application forms and announce
procedures for receipt and review of applications from state and
local agencies desiring to issue private activity bonds.
   (d) The committee may at any time, before or after granting any
allocations in any calendar year to any state agencies or local
agencies, announce priorities or reservations of any part of the
state ceiling not theretofore allocated either for certain categories
of bonds or categories of issuers.
   (e) The committee may require any issuer making an application to
the committee or MBTCAC for allocation of a portion of the state
ceiling to make a deposit, as determined by the committee, of up to 1
percent of the portion requested. If an allocation is not given, the
deposit shall be returned. If an allocation is given, the deposit
shall be kept, in proportion to the amount of allocation given, until
bonds are issued. Upon that issuance, the deposit shall be returned
to the issuer in an amount equal to the product of (1) the amount of
the deposit retained times (2) the ratio between the amount of bonds
issued divided by the amount of allocation granted. If no bonds are
issued prior to the expiration of the allocation, the deposit shall
be kept, unless the committee determines there is good cause to
return all or part of the deposit. Any portion of a deposit kept
shall be deposited in the fund.
   (f) The committee may transfer part of the state ceiling to the
MBTCAC, to be used for qualified mortgage bonds and exempt facility
bonds or for qualified residential rental projects, as those terms
are used in the Internal Revenue Code, together referred to as
"housing bonds," with directions and conditions pursuant to which
MBTCAC may allocate those amounts to issuers of housing bonds at both
the state and local levels. In carrying out these functions, MBTCAC
shall act solely as directed or authorized by the committee. If the
committee makes the transfer to MBTCAC authorized by this
subdivision, the references in Sections 8869.85, 8869.86, 8869.87,
and 8869.88 to the "committee" shall, for purposes of any housing
bonds, be deemed to mean MBTCAC.
   (g) (1) The committee may establish the Extra Credit Teacher Home
Purchase Program to provide federal mortgage credit certificates and
reduced interest rate loans funded by mortgage revenue bonds to
eligible teachers, principals, vice principals, assistant principals,
and classified employees who agree to teach or provide
administration or service in a high priority school. Priority for
assistance shall be given to eligible teachers, principals, vice
principals, and assistant principals.
   (2) For purposes of this program, the following definitions shall
apply:
   (A) "High priority school" means a state K-12 public school that
is ranked in the bottom half of the Academic Performance Index
developed pursuant to subdivision (a) of Section 52052 of the
Education Code. However, priority shall be given to schools that are
ranked in the lowest three deciles.
   (B) "Classified employee" means an employee of a school district,
employed in a position not requiring certification qualifications.
   (3) The committee may make reservations of a portion of future
calendar year state ceiling limits for up to five future calendar
years for that program. The committee may also make future
allocations of the state ceiling for up to five years for any issuer
under that program. Any future allocation made by the committee shall
constitute an allocation of the state ceiling for a future year
specified by the committee and shall be deemed to have been made on
the first day of the future year so specified. The committee may
condition allocations under the Extra Credit Teacher Home Purchase
Program on any terms and conditions that the committee deems
necessary or appropriate, including, but not limited to, the
execution of a contract between the teacher, principal, vice
principal, assistant principal, or classified employee and the issuer
whereby the teacher, principal, vice principal, assistant principal,
or classified employee agrees to comply with the terms and
conditions of the program. The contract may include, among other
things, an agreement by the teacher, principal, vice principal,
assistant principal, or classified employee to teach or provide
administration or service in a high priority school for a minimum
number of years, and provisions for enforcing the contract that the
committee deems necessary or appropriate.
   (4) If a teacher, principal, vice principal, assistant principal,
or classified employee does not fulfill the requirements of a
contract entered into pursuant to paragraph (3), the issuer of the
mortgage credit certificate or mortgage revenue bond may recover as
an assessment from the teacher, principal, vice principal, assistant
principal, or classified employee a monetary amount equal to the
lesser of (A) one-half of the teacher's, principal's, vice principal'
s, assistant principal's, or classified employee's net proceeds from
the sale of the related residence or (B) the amount of monetary
benefit conferred on the teacher, principal, vice principal,
assistant principal, or classified employee as a result of the
federal mortgage credit certificate or reduced interest rate loan
funded by a mortgage revenue bond, offset by the amount of any
federal recapture, as defined by Section 143(m) of the Internal
Revenue Code. The assessment may be secured by a lien against the
residence, which shall decline in amount over the term of the
contract as the teacher, principal, vice principal, assistant
principal, or classified employee fulfills the term of the contract,
and which shall be collected at the time of sale of the residence.
Any assessment collected pursuant to this paragraph shall be used for
the issuer's costs in administering the Extra Credit Teacher Home
Purchase Program. The issuers shall report annually to the committee
the total amount of any assessments collected pursuant to this
paragraph and how those assessments were used by the issuer.
   (5) If the committee establishes the Extra Credit Teacher Home
Purchase Program pursuant to this subdivision, the committee shall
report annually to the Legislature the results of the program,
including all of the following:
   (A) The amount of state ceiling limits allocated to or reserved
for the program.
   (B) The agencies to which state ceiling limits were issued.
   (C) The number of loans or mortgage credit certificates issued to
teachers, principals, vice principals, assistant principals, and
classified employees.
   (D) The schools or school districts at which recipients of
assistance are employed, aggregated by decile in which the schools
rank on the Academic Performance Index and by the percentage of
uncredentialed teachers employed at the schools.
   (6) The committee shall not make any reservations of future
calendar year state ceiling limits or future allocations of the state
ceiling pursuant to this subdivision on or after January 1, 2004,
unless a later enacted statute, that is enacted before January 1,
2004, deletes or extends that date. However, reservations and
allocations made prior to that date shall remain valid.

8869.85.  (a) Each state agency shall apply to the committee for
allocation of a portion of the state ceiling, supplying any
information which the committee may require. The application may be
for a specific project, or it may be for a designated dollar amount,
to be utilized for projects or programs at the discretion of the
state agency. No private activity bonds issued by any state agency
shall be deemed to receive the benefit of any portion of the state
ceiling unless the committee has allocated or permitted the transfer
of a portion of the state ceiling to the state agency. The allocation
may be on any terms and conditions as the committee may determine.
   (b) Any local agency may apply to the committee for an allocation
of a portion of the state ceiling, supplying any information which
the committee may require. Applications from local agencies may only
be for specific projects or programs. No private activity bond issued
by a local agency shall be deemed to receive the benefit of any
portion of the state ceiling unless the committee has allocated or
permitted the transfer of a portion of the state ceiling to the local
agency. The allocation may be upon any terms and conditions as the
committee may determine.
   (c) Any allocation made pursuant to this section shall be
irrevocable upon issuance of bonds pursuant thereto at least to the
extent of the amount of the bonds so issued. No allocation shall
permit the state agency or local agency which receives it to use all
or any portion of the allocation for a carryforward pursuant to
Section 146(f) of the Internal Revenue Code, unless the committee
expressly allows use of the allocation for a carryforward.
   (d) No allocation made to a state agency or a local agency
pursuant to this section may be transferred by the initial recipient
thereof to any other state agency or local agency unless the
committee expressly permits the transfer. With the committee's
permission, any state or local agency may, by resolution, transfer to
any other local agency or to any state agency or back to the
committee all or any portion of the agency's private activity bond
limit. Any such transfer shall be made in writing and may be general
or limited and subject to any terms and conditions as may be set
forth in the resolution or under the committee's permission, as long
as the transfer is irrevocable upon issuance of bonds pursuant to the
transfer, at least to the extent of the amount of the bonds so
issued. Each transferee shall maintain a written record of the
transfer in its records for at least the term of all private activity
bonds issued pursuant to the transfer. No transfer may be made
pursuant to this section in return for any payment of cash, property,
or other marketable thing of value.

8869.86.  (a) Subject to any limitations on transferred private
activity bond limit as may be provided in subdivision (d) of Section
8869.85, any state agency or local agency may utilize its private
activity bond limit for any of the following:
   (1) The issuance of private activity bonds.
   (2) If permitted by the committee, to make a carryforward election
pursuant to Section 146(f) of the Internal Revenue Code.
   (3) If permitted by the committee, to make a transfer to any state
agency, local agency, or the committee.
   (b) Prior to issuing any private activity bonds, the issuer shall,
in the bond resolution or other similar action giving approval for
the issuance of bonds, specifically designate to the bond issue a
portion of the private activity bond limit available or expected to
be available to that issuer. The designation shall be irrevocable
upon the issuance of the bonds to the extent of the amount thereof.
   (c) Each state agency and local agency shall notify the committee
in writing, as directed by the committee, after any of the following:
   (1) The issuance of any private activity bonds.
   (2) Any action taken pursuant to subdivision (d) of Section
8869.85 to transfer any portion of its private activity bond limit.
   (3) Any election to treat all or any portion of the state agency's
or local agency's private activity bond limit as a carryforward
pursuant to Section 146(f) of the Internal Revenue Code. The
committee shall keep the notices in its records for a period no less
than the term of all private activity bonds issued as described in
the notices.

8869.87.  The committee may request local agencies and state
agencies to provide the committee with information pertaining to the
amount and purpose of anticipated future private activity bond
issues, or any other information which may be useful to the committee
in performing its duties and responsibilities under this chapter.

8869.88.  The committee may transfer any private activity bond limit
directly to any joint powers authority created pursuant to Chapter 5
(commencing with Section 6500) of Division 7 of Title 1. This section
is specifically intended to be an expressed statement of an
alternative allocation as provided in Temporary Treasury Regulations
Section 1.103(n)-3T, A-14 and A-15, to the extent the regulations, or
any successor thereto or similar regulations, are applicable to
private activity bonds.

8869.89.  Notwithstanding any other provision of this chapter, the
committee may, upon any terms and conditions as it determines,
authorize the use of a portion of the state ceiling, as contemplated
by Section 146(n) of the Internal Revenue Code, in connection with
the issuance by any state agency or local agency or mortgage credit
certificates under a Qualified Mortgage Credit Certificate Program,
as those terms are defined in Section 25(c) of the Internal Revenue
Code.

8869.90.  (a) The committee may charge fees to the lead underwriter,
the bond purchaser, or the bond issuer to cover the committee's
costs in carrying out the duties and responsibilities set out in this
chapter. Any fees received shall be deposited in the California Debt
Limit Allocation Committee Fund, which is hereby created. All money
in the fund shall be available, when appropriated, for expenses of
the committee and the Treasurer.
   (b) Until the time that fees are received by the committee and
appropriated pursuant to this chapter for the expenses of the
committee, the committee may borrow any money as may be required for
the purpose of meeting necessary expenses of initial organization and
operation of the committee.
   (c) Any moneys received by the committee from fees or deposits
beginning in fiscal year 1987-88, shall also be deposited into the
fund.

8869.91.  This chapter is intended to provide a full, fair,
flexible, and workable means of utilizing the state ceiling available
under the Internal Revenue Code, and it shall be liberally construed
and implemented to achieve those purposes.

8869.92.  To the extent that any provision of this chapter is held
to be inconsistent with or repugnant to the federal law, the
provision shall be given effect in accordance with its terms to the
greatest extent possible and consistent with federal law and an
inconsistency shall have no effect on the remaining provisions of the
chapter.

8869.93.  The Treasurer, or his or her designee, is designated as
the state official to certify that an issue of private activity bonds
meets the requirements of Section 146 of the Internal Revenue Code
of 1986, as amended, and to take any and all actions as may be
necessary or appropriate in connection therewith.

8869.94.  The committee may adopt, amend, or repeal rules and
regulations pursuant to this chapter as emergency regulations in
accordance with the rulemaking provisions of the Administrative
Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2). The adoption, amendment, or repeal of
these regulations is conclusively presumed to be necessary for the
immediate preservation of the public peace, health, safety, or
general welfare within the meaning of Section 11346.1.