Section 8123 - Limits on Distributions(a) Sponsors other than governmental entities shall be allowed to distribute earnings from the assisted portion of the rental housing development in an annual amount no greater than 8 percent of its actual investment in the assisted portion. A sponsor shall not be subject to any limitation on the amount of distribution it receives from the nonassisted portion of the rental housing development. For purposes of this section, the assisted portion includes assisted units; the prorated share of common space, determined pursuant to section 8114(e)(2); and the child care center, if program funds are used to develop all or any portion of the child care center. The nonassisted portion includes units which are not assisted units; the prorated share of common space attributable to those units, determined pursuant to section 8114(e)(2); any commercial space; and the child care center, if no program funds are used to develop the child care center.(b) Except as noted in subdivision (c), actual investment, for the purposes of this section, includes cash and the market value of property contributed to the assisted portion of 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 the total project development costs of the assisted portion of the project. Actual investment does not include any payments of project funds to the sponsor. In syndicated projects, actual investment shall be net syndication proceeds as defined in section 8124.(c) For a project involving only rehabilitation and no acquisition or refinancing, actual investment is determined as follows: the market value of the rental housing development prior to rehabilitation, as determined in an appraisal, less outstanding debt prior to rehabilitation, plus any cash contributions to the project made by the sponsor, multiplied by the ratio of the assisted portion to the entire rental housing development.(d) 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.(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 due and payable debt service and operating expenses have not been paid; and(4) if the replacement reserve account, operating reserve account, or any other reserve accounts are not fully funded pursuant to section 8139 and the Regulatory Agreement.(g) Distributions of income attributed to the nonassisted portion of the rental housing development shall not be subject to the requirements of subdivisions (a) through (d).(h) When operating income is greater than approved operating expenses, regularly scheduled 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 Account. 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 the nonassisted portion of the rental housing development.Cal. Code Regs. Tit. 25, § 8123
1. New section filed 12-14-90 as an emergency; operative 12-14-90 (Register 91, No. 11). A Certificate of Compliance must be transmitted to OAL by 4-15-91 or emergency language will be repealed by operation of law on the following day.
2. Repealed by operation of law on 4-16-91.
3. New section filed 7-19-91 as an emergency; operative 7-19-91 (Register 92, No. 16). A Certificate of Compliance must be transmitted to OAL 11-6-91 or emergency language will be repealed by operation of law on the following day.
4. New section refiled 11-15-91 as an emergency; operative 11-15-91 (Register 92, No. 16). A Certificate of Compliance must be transmitted to OAL 3-16-92 or emergency language will be repealed by operation of law on the following day.
5. Certificate of Compliance as to 11-15-91 order transmitted to OAL 12-12-91 and filed 1-13-92 (Register 92, No. 16). Note: Authority cited: Sections 50406(n), 50884 and 50895, Health and Safety Code. Reference: Section 50893.7, Health and Safety Code.
1. New section filed 12-14-90 as an emergency; operative 12-14-90 (Register 91, No. 11). A Certificate of Compliance must be transmitted to OAL by 4-15-91 or emergency language will be repealed by operation of law on the following day.
2. Repealed by operation of law on 4-16-91.
3. New section filed 7-19-91 as an emergency; operative 7-19-91 (Register 92, No. 16). A Certificate of Compliance must be transmitted to OAL 11-6-91 or emergency language will be repealed by operation of law on the following day.
4. New section refiled 11-15-91 as an emergency; operative 11-15-91 (Register 92, No. 16). A Certificate of Compliance must be transmitted to OAL 3-16-92 or emergency language will be repealed by operation of law on the following day.
5. Certificate of Compliance as to 11-15-91 order transmitted to OAL 12-12-91 and filed 1-13-92 (Register 92, No. 16).