Section 8089 - Limits on Distribution(a) A nonprofit corporation shall be limited to an annual distribution on the sponsor's actual investment in the entire project in an amount not to exceed eight percent per annum.(b) A for-profit sponsor shall elect, prior to loan closing, to be limited in accordance with one of the following options: (1) The sponsor shall be limited to an annual distribution on the sponsor's actual investment in the entire project in an amount not to exceed eight percent per annum; or(2) The sponsor shall receive no distribution from assisted units, and shall not be subject to any limitations on the amount of the distribution it receives from nonassisted units.(c) A sponsor may not accumulate distributions from year to year. A sponsor may deposit all or a portion of the amount permitted for distributions into a project account for distribution in subsequent years. Such future distributions shall not reduce the otherwise permitted distribution in those subsequent years.(d) Actual investment, for the purposes of this section, includes cash and the market value of property contributed to the project by the sponsor. For projects receiving state or federal low-income housing tax credits, the amount of actual investment recognized by the department for the purpose of calculating allowable distributions shall not exceed fifteen percent of total project development costs. Actual investment does not include any payments of project funds to the sponsor. In syndicated projects, actual investment shall be calculated net of the costs of syndication, such as the syndicator's fee and syndication-related legal expenses.(e) In its initial operating budget, the sponsor shall demonstrate to the department the amount of the sponsor's actual investment on which the allowable distribution will be calculated. The actual investment amount shall be increased in subsequent budgets upon a showing of additional actual investment advanced by the sponsor.(f) Distributions shall be permitted only after the sponsor submits a complete annual report and operating budget and the department determines that the report and budget demonstrate compliance with all program requirements for the applicable year. Circumstances under which no distributions shall be made include: (1) when written notice of default has been issued by any entity with an equitable or beneficial interest in the rental housing development;(2) when the department determines that the sponsor has failed to comply with the department's written notice of any reasonable requirement for proper maintenance or operation of the rental housing development;(3) if all currently required debt service and operating expenses have not been paid;(4) if the replacement reserve account or any other reserve accounts are not fully funded pursuant to section 8102 and the Regulatory Agreement.(h) Distributions attributed to income from commercial space shall not be subject to limits pursuant to this section.(i) When operating income is greater than approved operating expenses, debt service, scheduled reserve deposits, approved prepayments, approved annual distributions, and any other disbursements approved by the department, then the department shall require that such excess be paid into the Emergency Reserve Account established pursuant to section 8103. For purposes of calculating the amount of excess funds pursuant to this subdivision, operating income and expenses shall not include income or expenses from commercial space, or, where the sponsor elects to have their return limited pursuant to subdivision (b)(2), from nonassisted units.Cal. Code Regs. Tit. 25, § 8089
1. New section filed 12-29-89 as an emergency; operative 12-29-89 (Register 90, No. 3). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed by operation of law on 4-30-90.
2. New section refiled 4-26-90 as an emergency; operative 4-26-90 (Register 90, No. 23). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed by operation of law on 8-24-90.
3. New section refiled 8-27-90 as an emergency; operative 8-27-90 (Register 90, No. 42). A Certificate of Compliance must be transmitted to OAL by 12-26-90 or emergency language will be repealed by operation of law on the following day.
4. New section refiled 12-19-90 as an emergency pursuant to Health and Safety Code section 50771.3; operative 12-19-90 (Register 91, No. 4). A Certificate of Compliance must be transmitted to OAL by 4-18-91 or emergency language will be repealed by operation of law on the following day.
5. Certificate of Compliance as to 12-19-90 order transmitted to OAL 1-4-91; disapproved by OAL 2-4-91 (Register 91, No. 13).
6. New section refiled 2-20-91 as an emergency; operative 2-20-91 (Register 91, No. 13). A Certificate of Compliance must be transmitted to OAL by 6-17-91 or emergency language will be repealed by operation of law on the following day.
7. Certificate of Compliance as to 6-14-91 order including amendment of subsection (e) transmitted to OAL 5-15-91 and filed 6-14-91 (Register 91, No. 38). Note: Authority cited: Section 50771.1, Health and Safety Code. Reference: Section 50771.1, Health and Safety Code.
1. New section filed 12-29-89 as an emergency; operative 12-29-89 (Register 90, No. 3). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed by operation of law on 4-30-90.
2. New section refiled 4-26-90 as an emergency; operative 4-26-90 (Register 90, No. 23). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed by operation of law on 8-24-90.
3. New section refiled 8-27-90 as an emergency; operative 8-27-90 (Register 90, No. 42). A Certificate of Compliance must be transmitted to OAL by 12-26-90 or emergency language will be repealed by operation of law on the following day.
4. New section refiled 12-19-90 as an emergency pursuant to Health and Safety Code section 50771.3; operative 12-19-90 (Register 91, No. 4). A Certificate of Compliance must be transmitted to OAL by 4-18-91 or emergency language will be repealed by operation of law on the following day.
5. Certificate of Compliance as to 12-19-90 order transmitted to OAL 1-4-91; disapproved by OAL 2-4-91 (Register 91, No. 13).
6. New section refiled 2-20-91 as an emergency; operative 2-20-91 (Register 91, No. 13). A Certificate of Compliance must be transmitted to OAL by 6-17-91 or emergency language will be repealed by operation of law on the following day.
7. Certificate of Compliance as to 6-14-91 order including amendment of subsection (e) transmitted to OAL 5-15-91 and filed 6-14-91 (Register 91, No. 38).