1. (a) The department shall establish a feasibility subaccount in the Account. Four (4) percent of any allocation made to the Account pursuant to Health and Safety Code section 53130(a) shall be deposited into the feasibility subaccount. Excess funds returned to the department pursuant to section 8123(h) and 8117(e)(2)(B) shall be deposited into the feasibility subaccount to first replace the allocated funds in the subaccount on a dollar-for-dollar basis and then to replenish the feasibility subaccount. Excess funds received which cause the subaccount to exceed four percent of all allocations to the Account shall transfer to the Account and become available for loans pursuant to this subchapter.

2. (b) To the extent necessary to assure or preserve fiscal integrity and to establish or maintain rents in accordance with program requirements, the department shall be authorized to advance funds from the feasibility subaccount when necessary:

   1. (1) to defray unforeseeable construction cost increases prior to the completion of construction; or
   2. (2) to defray unforeseeable capital expenses at any time during the term of the loan.
3. (c) All funds advanced pursuant to subdivision (b) shall be part of the program loan to the sponsor and subject to the same interest rate and terms of repayment.

4. (d) Upon determination that another percentage is more appropriate based on the actual demand on the subaccount by program sponsors, the department shall alter the percentage of the allocation that is required to be maintained in the subaccount in order to meet the actual demand.

   1. (1) Such a determination will occur either at the time of a new allocation to the Account or during the annual review of the subaccount.
   2. (2) The percentage of all allocations to the Account that shall be maintained in this subaccount shall not be adjusted to exceed ten percent.

Note: Authority cited: Sections 50406(n), 50884 and 50895, Health and Safety Code. Reference: Sections 50883.5(a) and 53130, Health and Safety Code.

History

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 A Certificate of Compliance must be transmitted to OAL by 4-15-91 or emergency language will be repealed by operation of law on the following day.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 Repealed by operation of law on 4-16-91.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).